Investment Q&A

Q: Hi Team,

I need your valued opinion on an upcoming IPO.
Prem Watsa of Fairfax Finl Hldgs fame along with some big institutional heavy wieghts is coming to market to raise money for an Indian Fund, i believe its a US funds IPO. I think its already been priced ( $10.00 per share) and could be coming to market as soon as this week. On a sde note, would you know if TD Financial is part of the selling group?

Thanks for you all you do!

Stephen

Q: This company is rarely mentioned. What would be your assessment of the company given current market conditions? Would you consider it a buy?
Thank you for your insight!

Q: Central Gold Trust appears to be undervalued. The Trust holds segregated bullion in a major Canadian Bank. What do you think of this method of participating in the gold sector without personally owning gold?

Q: This just came up on in my stock screening process. With a nearly 10% yield it looks like a buy. Do you know anything about this investment? Can you shed any light on it? Thank you. Michael.

Q: How will increasing rates affect the distribution of this fund? I recognize that the stock price will likely get hit further, but shouldn't the dividend be safe or even have potential to increase as they roll over loans at higher rates? I have held for about 18 months, and am just up slightly taking into account dividends. Would you continue to hold, if holding for income only? Do you view this stock as more equity or more fixed income?

Thanks

Q: Hi.... More of a comment than a question.
Eit.un recently redeemed 20 percent of the units I tendered to their annual voluntary redemption offer. The redemption price per unit exceeded the current market price by $1.45 per share. 20% of $1.45 is 29 cents. The annual Mer on this fund is approximately 25 cents per unit per year.
As a result owners of Eit.un who tender and then re purchase the tendered units get the fund services for free. Cool, eh?

Q: What is your opinion on this fund and could you explain what their relation is with rising/falling interest rates.
Why is this fund dropping so drastically as of late?
Want to wish you all a happy new year.

Q: Can this stock maintain its payout going forward.

Q: As a follow up to Janice's question re: Health Care ETFs, on Dec 12 Market Call Jaime Carrasco mentioned a new ETF being launched within 2 weeks by Guardian (Harvest?). He indicated it would be a Canadian based ETF, covering USA-based health care companies (I guess similar to how TCN works), with a 7% dividend and the symbol was to be HHL.U (I might have the symbol wrong). Have you heard anything about this?

Thanks,
Steve

Q: I'm looking to place some money into a "long-term" hold ETF. While I have usually went with traditional index-trackers (think most iShares/Vanguard), I'm now starting to look at some of the new funds by Purpose Investments.

Any thoughts on PHR (Purpose Duration Hedged Real Estate) or PRA (Purpose Diversified Real Asset Fund)?

Q: With the recently announced change in US/Cuba relations would you recommend this etf?

Q: I have an investment in the Global Infrastructure fund (GIF.UN). As luck would have it, it's gone straight down since I purchased it. The yield is 6% so I like that but being down 11% on my capital offsets that value significantly. The Middlefield company website suggests an NAV $2 higher that the current unit price ($11 vs. $9). Is the posted NAV yet catch up with the real value? The top 10 holdings look like good companies to me. I could average down, sell or hold. Not sure at this point what to do. Any thoughts?
Second part question is that I don't healthcare exposure and wondering what you think of Middlefield's new healthcare fund GHC.UN is a good place to invest or would you suggest something else for exposure in this space? What's your opinion of the quality of the Middlefield management to provide a good investment vehicle, stable returns and growth?

Thank you.

Q: On November 20th Harvest Portfolios Group Inc. issued a news release announcing it had filed the final prospectus for a new fund which will invest in an equally-weighted portfolio of equity securities of 20 healthcare issuers listed on a North American stock exchange. Offering is scheduled to close on December 18 and the units will be listed on the TSE under HHL.UN.
Are you aware of this new fund? Do you know Harvest Portfolios Group management? What is your opinion as I am interested in investing in health care?
Thank you very much.
Nadine

Q: Peter and Team,

This is sort of a follow up to a question I had yesterday regarding finding shorter term or floating rate bond instruments in which to invest. Ideally, I'd get a product that didn't get creamed by rising rates and paid me a good yield.

What are your thoughts on O'Leary's Floating Rate Income Fund OFR.UN?

Thanks,

Marc

Q: i own a large position in this and thought it was fairly safe with a VG dividend ... seems to have dropped a little, do i need to worry about this if interest rates rise ...thx

Q: Would you consider Brookfield Total Return Fund: HTR-US a good- reasonably safe investment in the current market situation. Also, do you think the dividend is safe at this level (approx 9% yield)?
Thank you.

Q: When I assumed control of my RRSP from the broker , I found OCV-UN in overly large amounts. Broker piled in at IPO price of $12. (Broker was dealer-advisor). I left the holding as was for the wrong reason, namely : OCV.UN has dropped significantly from cost such that monthly distribution is now around 9 to 10% p.a. I am uncomfortable with O’Leary. Are you able to suggest one or more ETFs that could take the place of OCV.UN? In the alternate, if you feel it’s OK to leave it alone for now, I would be thankful for knowing that.
Thank you and all the best
Adam

Q: Canadian Banc Corp is an Investment Corporation
that invests in a diversified portfolio consisting of six
Canadian Banks. Two types of shares are available, a
Class A (BK) and a Preferred (BK.PR.A).

I have had class A shares for a few years and am very pleased. It seems to good great dividend and capital gains . I see the very low liquidity as a big problem. I believe you are not supportive of the structure and the fund.
Would you reduce as it is 6% of holding with no other bank exposure? what other red flags would you look out for.
thanks
Yossi

Q: I thought this article by Rob Carrick (Oct 23rd) would be of interest to your Members.
Any comments on it from 5i would be welcome as CBO is often recommended on the site as providing a 4% + return.

Thanks in advance:

"You're probably not getting the yield on bond ETFs you think you are"
Oct 23, 2014 by Rob Carrick


"Some of the most stubborn investors out there are the ones who believe they’re getting yields of as much as 4 per cent on their mainstream bond ETFs."

"Consider the popular five-year laddered corporate and government bond funds offered in BlackRock Canada’s iShares family of exchange-traded funds (CBO and CLF). If you find quotes for them on Globeinvestor.com, you’ll see yield of 4.2 per cent for the corporate bond ETF and 3.6 per cent for the government bond ETF. For comparison’s sake, a Government of Canada five-year bond yields about 1.4 per cent a 10-year Canada bond gets you just short of 2 per cent."

"I am continually surprised by the number of investors who don’t question these bond ETF yields further. They insist on believing they are getting double the yields available on government bonds. Think about it, people. If bond ETFs offered such outsized yields, wouldn’t investors have piled into them and driven the yields down? As prices rise for bonds and bond ETFs, yields fall."

"If you’re in the group that takes the published yields for bond ETFs at face value, let me direct your attention to the yield to maturity numbers displayed on the fund profiles for CBO and CLF on the BlackRock website. CBO clocks in at 2 per cent, or 1.7 per cent after fees. CLF comes in at 1.4 per cent, or 1.2 per cent after fees."

"The yields you see in bond ETF quotes is the distribution yield, which is based on the previous 12 months’ worth of interest payments and the current share price for the bond ETF. If the price of a bond ETF stayed put, then distribution yield might mean something. In fact, the price of CBO and CLF units have been falling in recent years. Globeinvestor.com shows a three-year cumulative drop of 3.6 per cent for CBO and almost 5 per cent for CLF. A lot of the bonds held in these ETFs have been trading at prices that are above their value at redemption. As these bonds approach maturity, they decline in price."

"If you want to know what yield you’ll get from a bond ETF on a total return basis – that’s interest paid out combined with changes in the unit price – then check yield to maturity. The distribution yield is a much happier number, but it’s not the whole picture."

Q: Your thoughts on PDV and GII.UN. They both pay a good dividend.