Q: It's been almost a year since I asked about this one (QTIP - Mackenzie US TIPS Index ETF (CAD-Hedged)). I've held it for over 3 years and it has certainly dropped (I'm down about 11%) and over the last 12 months it just seems to be flatlined between $ 83 and $87. Why should I want to keep this one vs. just selling it and moving $$ to something paying a higher dividend (maybe BCE or ENB) ? Or will dropping interest rate finally be the catalyst to breathe some life into this one ?
5i Research Answer:
The yield curve has not been kind to QTIP, as the inflationary forces in 2022/2023 did not impact all maturities of bonds. 5-year return is now only 1.50%. Being hedged has not helped as the strength of US dollar has not helped the fund due to the hedge. As inflation drops and rates drop, the portfolio may see some gains. But we cannot really compare a bond fund to individual dividend stocks. But considering the market outlook, we do think dividend stocks should outperform this over the next couple of years and we would be fine switching to a group of stocks or a dividend ETF if that meets an investors' objectives.