Q: Here is a challenge for investors to beat financing charges. The financing is 2.4% for 36 months and I need better than 2.6% to pay taxes on unregistered account. With a ladder of tbills, bonds and strips one can obtain 3.1% with very little risk. If one could live with a bit more risk ( say possibility -5% over the term) are there any other options such as a low volatility income fund or preferred shares?
5i Research Answer:
A preferred fund such as CPD yields 5.16% and we think could work. There are enhanced covered call funds such as HDIV yielding more than 11%. A simple utility fund such as ZUT yields 4.23%. Dividend growth CDZ yields 3.71%. These all have more risk of course than T Bills and returns and yields will vary. HDIF (covered calls again) yields 10.23%.