Investment Q&A

Q: Good morning, Is it a good time to invest in US corporate bonds? What would you recommend to get through these turbulent times in the market?

Q: I think there may be some confusion about my previous question re VFV and also a question posed by umedali.
I may have misunderstand, but you seem to imply that VFV would undergo double taxation (withholding) because it is an etf that holds another etf. Is that what you mean by a “second level” of tax?
I am not sure this is correct. The etf being held by VFV would be U.S. domiciled, which would not be subject to tax on the dividends it receives from U.S. companies. However, VFV, being Canadian, would be subject to tax on the flow through of dividends to it from the underlying etf. Then, after this, the dividends should flow through to a Canadian holder without further tax, since it is from a Canadian listed etf. So only one round of taxation. Unfortunately, they call it “level 2” taxation in that link you provided, which is about the most ambiguous label they could have possibly come up with.
As far as I can tell, double taxation would only come into play if the underlying etf held by VFV itself held foreign securities (ex European stocks).
Apologize if I’ve got this all wrong, it’s not very clear on the Vanguard website imo.

Q: A fellow on BNN market call recommended holding actual gold rather then gold minning companies.He suggested PHYS.What are your thoughts??

Q: My son is starting an FHSA account at Wealthsimple. With the goal of contributing monthly and maximizing the limit over 5 to 7 years before needing funds. What combination of ETF's and blue chip stocks would you recommend that combines steady/increasing dividends, capital appreciation and minimal downside risk. Looking for a manageable # and combination of stock/Etf

Thank you

Q: Is there any ETF that are holding stocks that are only outperforming SP500.

Thanks for the great service

Q: Hello Peter,
From an earlier question on VFV in terms of foreign taxes, it looks like there is a double taxation as VFV invests in US ETF not directly in US stocks.. I would think i am better off with xsp excepts the etf hedges. Would i better off just investing in SPY or is there another ETF that is like VFV but invests directly in US stocks.. Thanks very much

Q: Recently retired younger couple. Need to continue to preserve and grow portfolio, but also need to secure near term income stream.

I am looking to shift some equity to fixed income and trying to decide the best approach.

I have registered and non registered accounts. The non registered account is in dividend payers, and will leave this as is. Tax treatment is good, flexibility is good, recession proofish.

I am considering changes to the setup of my registered accounts. Two main options appear to be:

1. Move an registerd account from the current discount broker (Questrade) to somewhere like EQ bank and buy laddered GIC's. Advantage - CDIC protection, maybe very slightly higher rate of return. Disadvantage - Admin pain, loss of flexibility

2. Stay with current discount broker and simply move into CASH.TO

I am strongly leaning to option 2 - am i missing something here?
Why would i go to the trouble of option 1?
Are there other (better) options?
How big of a risk is there with something like CASH not having CDIC protection?

Thanks,


Jim

Q: For etfs like these held in a cash account, is the holder paying a withholding on the yield, in some way?
Is the tax withheld at the level of the etf provider, or would one see the amount withheld in one’s brokerage account.

Q: In your answer to my previous question on HBND you said that a 10% allocation would be good. Did you mean 10% of the whole portfolio or 10% of the bond portfolio (so example 10% of a30% bond allocation would be only 3%).

Q: Just a follow up to a previously answered question regarding which ETFs you would choose. What would be your weighting in a portfolio containing SPY, QQQ, IJH, AGG and VYM?

If you were to remove bonds (AGG) altogether, where would you allocate weighting?

Q: There have been a number of questions recently asking how to construct the best etf portfolio. I thought you did an amazing job in answering these. I had a couple of questions, though, to which I like your response.

You recommend SPY. I believe you also answered QQQ in some place. Would one need QQQ if one already owned SPY? I am speaking here as an average retired investor willing to take a little risk. The concern is that the top ten holdings of the two funds is quite similar. The other concern relates to thèse top ten holdings. A lot of both funds is invested in high flying technology stocks. You often mention that the danger in investing in a Canadian index fund is that they are heavily weighted to three industry sectors. Wouldn’t the same fear hold true for SPY? And if so, would a good work around be a combination of a market weighted fund, such as RSP and an appropriate balance of SPY and QQQ?
Thanks

Q: I'd like to diversify my portfolio by adding some exposure to emerging markets without the inclusion China. Please suggest some ETFs that:
1. would give me exposure the equities of strong corporations
2. would enable me to own bonds of both corporations and countries.
Also, I would appreciate protection against currency fluctuations.

Q: Could I have 5i's analysis and recommendations on Hamilton's new ETF HBND ? A 10% yield on US treasuries seems like a pretty secure investment ...... Please assess versus other bond ETF's available on the market as the fixed income side of a portfolio ?.....And from a second point of view on whether it also might be a pretty safe place to park cash as well ? Can't really see a whole lot of volatility with US Treasuries but I know very little about the bond market .....

Q: I know that you've answered a lot of questions on HMAX lately and I have read all of the answers but I still have some questions as I don't fully understand the risk of the product. Please take as many credits as you need to answer:

1. Usually high yield means higher risk, but I'm assuming because covered calls are being used to generate this income that this statement doesn't apply? Can you confirm explain?

2. How risky is this compared to an equity ETF? Higher or lower risk?

3. Is there any long term scenario where this would underperform cash?

4. Generally what would be a safe portfolio weight for this type of product?

Q: Could you explain what RBC10266 is offering and the risks involved?

Q: Hello 5i, common question for you but I have very little bond exposure and was looking to start building a fixed income portfolio. Can you give me your current top 5 bond picks (assuming ETF's). This can be USA or Canada bonds.

Q: I going to initiate a sizable position in VTI.US and VUS.T, what would you consider a good entry point and a great entry point. And would it make sense to leg in over a six month period? Thanks for your expertise.

Brian

Q: If you were to build a portfolio of just ETFs, what 6-8 would you select? Maybe ignore Canada for this scenario as I have plenty of individual positions I'm quite happy with.

Q: Hi team,

I currently have IWO as a core holding. I would like to change to a more concentrated ETF holding either in small or mid cap US. With so many different factors to choose from such as large/medium/small cap, dividend/value/growth/blend, current valuations, etc... and looking at past returns over various time periods, how does one choose the best ETF to invest in going forward now? I would consider all these ETF's to be high quality and obviously no one knows what the range of future returns will be. With small/mid cap underperforming lately vs large cap, would you place your bets on that spread closing over time? I'm comfortable with volatility and have a long term time horizon (+15yrs). How would you rank these going forward for best risk adjusted returns?

Thank you!

Q: Hi Team,
For an 18 years old's TFSA, is having equal weights of VFV and XQQ diversified enough? If not what other Canadian ETF or stocks would be a good fit?
No commission costs for trading so quantity is not an issue.
Thanks