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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hi,
I am wondering what your thoughts are on ETFs that focus on China. As it reopens, do you see any benefit to owning either an ETF, or possibly specific shares, that are expected to grow coming out of Covid? CNXT is another ETF I've looked at, but it is not in your database. My portfolio is about 60% in Canada, the balance in US and I have been focusing on adding more US exposure, mainly in the tech and health care sectors. I also find it interesting that the auto industry in China gained as Covid restrictions eased and am seeing a bit of follow through in the US auto industry, possibly driven by TSLA - but I am not sure why that would be, as I would think it is the last thing anyone would be buying now. If adding more international exposure, what would be a good target percentage and does this make sense at this point in time? Please deduct points as you see fit.
Thanks - your suggestions are always welcome!
Dawn
Read Answer Asked by Dawn on July 07, 2020
Q: I'm interested in covered calls and note that ZWU, ZWC and ZWH are all down 15-20% YTD.
For an income portfolio, they look very appealing with their 7% to 9% yield.
Would you recommend to bump up the income?
What % of an income portfolio would you recommend?
Can you rank from most to least favourite?
Read Answer Asked by Curtis on July 07, 2020
Q: Hi Guys
I own shares in Tobias Carlisles " The Aquires Fund" the symbol is ZIG
This is a Value ETF, small in size and has an MER of around 0.9%
My concern is that it doesn't pay a dividend, I imagine he re invests the dividend proceeds back into the fund?
I was thinking of selling it and replacing it with VVL, this actively managed ETF has an MER of 0.37% and a Dividend of 3.41%
Is it not really compelling Value here on the fundamentals?
I think it trades on a P/E of less than 10x. There might be risk though in some of his Holdings.
If there is a move back into value..this might return 30% or so, or would you still sell it and replace it with XWD.
Thanks!
Gord

Read Answer Asked by Gordon on July 07, 2020
Q: I have very little healthcare in my portfolio and also need to diversify geographically. There are so many opinions on what types of healthcare to invest in (drugs, medical devices (knees, hips), insurance, pharmacies, etc.) that I am struggling to jump in. What would be your top three healthcare related choices (outside Canada) to invest in for the long term.

Thank you for the great service you provide

Sean
Read Answer Asked by Sean on July 06, 2020
Q: On July 2, 2020 John asks for tech oriented ETF suggestions; you mentioned a couple but not TEC or HXQ. Are these tech oriented? Any particular reason why you would not want to consider them? Also, I am thinking of taking positions in these ETFs as and then selling some of the large US tech names I hold directly and then diversify into other US areas; would these be a good strategy? Last, about ETFs generally, does the price of an ETF depend solely on the values of the underlying securities, or can the price also be affected by the demand for the units? thanks for your excellent service.
Read Answer Asked by Leonard on July 06, 2020
Q: I am currently reviewing my mother's non-equity portion of her retirement portfolio. She currently owns CLF, ZAG and short-term GICs. The interest from these investments are not needed for immediate living expenses. The non-equity investments in her portfolio serve to reduce volatility, and provide peace of mind.

Everything I have read recently indicates that interest rates have likely made a long-term bottom. As such, I am wondering whether my mother should sell ZAG and keep her interest-bearing investments in short-term, secure instruments only (i.e. CLF and GICs). In short, should she be staying away from mid-long term bonds?

Jeremy Siegel recently recommended that retirees should modify the traditional 60/40 stock/bond portfolio to 75/25 going forward because he does not anticipate good returns from longer-term bonds. Do you agree?

Many thanks for your thoughtful and valued insights.
Read Answer Asked by Dale on July 06, 2020
Q: Hi,
Seems to be talk about gold hitting 1900.00 - do you think it is talk, or has possible legs? If it has legs what's the best instrument to invest in? ETF's or stock picking? Either way, would your preference be in US dollars or Canadian? I am wondering if gold does soar, whether or not it will help to drive the value of the US dollar down. So lots of questions - deduct points as you see fit & as always, thanks for your thoughts and suggestions!
Dawn
Read Answer Asked by Dawn on July 06, 2020
Q: To reduce my Tech Sector allocation I am planning on selling Microsoft(3% of my equity portfolio). Initially I was thinking of purchasing additional shares in VIG but have been also thinking about a US Healthcare ETF such as XLV. Comparing returns and fees for a long term hold which of these two ETFs would you recommend? Thank you for your input.
Read Answer Asked by Elizabeth on July 06, 2020
Q: Natural gas is at its lowest level since 2009.
With employment and industry picking up, and interest in renewable and clean energy would investing in natural gas at this time be a good candidate for a contrarian move? Is HUN a good way to invest in this? Does it pay a dividend or Interest? Would you suggest a different way to invest in natural gas if HUN is not your favourite?
Thanks
Read Answer Asked by Ric on July 03, 2020
Q: Hi 5i team,
I would like to have emerging markets equity exposure within my RRSP. Currently, my RRSP holds mostly US situs securities in a U.S. dollar brokerage account (TD-Waterhouse). I am debating between buying VWO (trades in US$) or ZEM (trades in CAD$). I use Norbert’s gambit to convert between currencies, so doesn’t matter so much if I make conversion now (from US$ to CAD$, if I buy ZEM now) or later when I need to withdraw the funds (if I buy VWO now, raising US$ from sale of US$ securities already held, and later converting to CAD$ when funds required for RSP withdrawal). Any emerging markets ETF(s) purchased now would likely be held at least 10 years (potentially, much longer, depending on longevity—spouse and I are both aged 60). One other consideration; we are HNW situation, so US estate tax considerations potentially in play, too (depending on U.S. laws at time of our demise, and specific holdings owned at that time; this consideration would favor ZEM). My question—given the above considerations (currencies, fees within RSP, estate)--which one of these two ETFs would you recommend for long-term emerging markets exposure within an RSP (or, if there is another ETF you would recommend for long-term RSP holding for emerging markets, which would it be, given the above situation?).
Read Answer Asked by Ted on July 03, 2020
Q: I sold my business and started investing last year. I am trying to build balanced portfolio and struggling with the bond portion. I don't want to buy individual bonds and was looking into something like HBB for unregistered portfolio and VAB and XSB for registered. Yet, I am very uneasy about buying bond ETFs in the near-zero interest rate environment - the rates can only go up (unless we end-up with negative rates here) and, obviously, bond ETFs will be going in the opposite direction. I was thinking about VSC but almost 35% of it are junk bonds, so no comfort there. With PSA now paying only 0.65%, I am really out of choices for the fixed income portion of my portfolio. Any suggestions (both for CDN and USD positions)? My time horizon is 10 years and I want something safe and tax efficient.
Read Answer Asked by Marie on July 03, 2020
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