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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: I hear that those who make covered call ETF(s) are having a problem with the level of volatility. Do you understand what that means and whether that could cause some less liquid ones to dissapear, perhaps under a condition in their prospectus? I suppose black swan events like this one can make complicated products even more complicated to manage. Thank you.
Read Answer Asked by Matt on March 17, 2020
Q: Please recommend a CAD unhedged US tech ETF and CAD unhedged US industrial ETF or any ETF which has a combination of both and would you buy at this time? Long term hold (10+ years) and medium to high risk. Thanks.
Read Answer Asked by K on March 17, 2020
Q: A friend tells me she has a mutual fund that attracts a capital gains tax every year even though she hasn't sold any units. I understand how that happens but I'm wondering: are there any equity mutual funds out there that won't attract capital gains tax (or losses) every year?
Read Answer Asked by Fred on March 17, 2020
Q: Hi there, just a follow up to my previous question. You mentioned a good strategy to get back into the market was to buy a 5% tranche on a 5% dip in the QQQ. If purchasing in Canada in a registered account, would ZQQ/ZNQ be good choices? Also, would you be doing 50/50 ZQQ/ZNQ split? Thank you!
Read Answer Asked by Michael on March 17, 2020
Q: Hello 5i,
What do you think of REM as an income stock for a retired person?
Thank you.
Lisa
Read Answer Asked by Elisabeth on March 17, 2020
Q: I have used this etf several times in the past. Most recently, I bought about three weeks ago, fearing the economic effect of the virus. Each time I have bought I have felt that I have violated one of the basic tenants of investing...don’t buy something you don’t really understand. I appreciate that the etf uses derivatives, of course, and thus may be subject to the risks of the solvency of the counter parties. Could I please ask your advise as to whether counter party risk is an issue with this etf given its strong performance of late?
Thanks as always
Neil
Read Answer Asked by Neil on March 17, 2020
Q: ZWK has fallen dramatically in this oil and coronavirus crisis. It now yields more than 10% with a 16 cent monthly distribution. Is this higher yield now a red flag for this ETF and U.S. Banks in general? Your thoughts are appreciated on the risks for it going forward, and given it's holdings and exposure to this downturn, and history, the likelihood that it may cut it's distribution. Thank you.
Read Answer Asked by Will on March 17, 2020
Q: Can I get your thoughts on this etf? It only has $34 million in net assets. I am looking for a government bond ETF with a 1 to 5 year bonds with a reasonable management fee. Trying to get a bit more yield than GICs while preserving my capital. Any other investments that can achieve this? Thanks for your suggestions.
Read Answer Asked by Rino on March 17, 2020
Q: ETFs
- is it correct that net asset value is determined once daily based on the closing price for the day?
- if correct, shouldn't the trading price reflect changes during the day, disregarding the NAV at close of the previous day?
- if the trading price doesn't reflect changes during the day, I suppose, in the case of a big change in underlying securities during the day, one should postpone a trade decision until the NAV for the previous day is published
- when will the NAV for the previous day appear in the quotation services? By open of trading on the following day?
Read Answer Asked by Carl on March 16, 2020
Q: Hi 5i,
I am not 100% clear on stock and ETF's allocations for investment plans. Take as many points as needed to answer the questions below. I apologize in advance for the length of the question.

As a Canadian investing through a Canadian site (RBC in this case), split into CDN and US sections (moved CDN funds to USD and paid the exchange), which stocks and ETF's should be allocated to RRSP (CDN or US sections), TFSA, & Non-Registered accounts?

As an example, an RBC RRSP account is split into CAD and USD segments. If I purchase VWO in USD on the US segment instead of VEE on the CDN segment do I retain the 15% withholding tax? If I purchase VWO in CDN funds on the CDN side of the RRSP, what happens to the 15% withholding tax?

Is there a tax difference when filing a CRA 1135 form. e.g if VWO or VEE are 100+k CDN value: VWO on the USD segment or VEE on the CDN segment or VWO on the CDN segment.

If a US stock has a dividend, should this ever be purchased on the CDN side of the RRSP or in a TFSA? .. e.g. CRM with a small dividend or AMGN with a larger dividend

Can you please assign the best allocations (RRSP, TFSA, Non-Registered) to examples a the bottom of the question.
e.g. Non-dividend Growth US stocks (Googl, AMZN): TFSA, RRSP
This tells me that AMZN is best in the TFSA for growth, and in an RRSP purchased in CDN or US funds is the same effect other than currency at the time of purchase.
If a stock or ETF should be in CDN or US sections can you note that as well? e.g. RRSP(CDN or US).
It is a lot to ask so limited examples below will hopefully reduce the effort.

5i recommendations
Non-dividend Growth US stocks (e.g. Googl, AMZN):
US small Dividend Growth (e.g. IWO):
US Foreign ETF (e.g. VWO):
CDN ETF with US stocks and other int'l stocks (e.g. VEE):
CDN High Dividend (e.g. CDN Utilities/Reits/ETF's):
US High Dividend (e.g. US Utilities/Reits/Medical/ETF's)
All World ETF (VT):
All World ETF (XAW):

I very much appreciate your service and time to answer questions.

Jerry
Read Answer Asked by Jerry on March 16, 2020
Q: I am looking to follow the S&P 500. I am not sure what etf is best to use. I have seen you recommend VFV in Q&A but your model etf portfolios hold ZSP. Is there one you would choose over another? Is there another option I should consider? If you can advise if it is best to put in a register or unregistered account. I have room in both my TFSA and RRSP.

Thank you for the great service.
Read Answer Asked by Justin on March 16, 2020
Q: There were a couple of questions today on BMO's ZCS. Both your replies suggested not too much concern holding the short term corporates over a longer period of time. Do you have differing thoughts on ZCM and ZLC? BBB rated bonds in ZCS, ZCM, ZLC are 36%, 58%, and 39% respectively.

Also of note all three seem to have a large discount to NAV. Yesterday between 4.3 to 5.5% (ZLC being the highest). Not sure that is normal, or not, as I don't look that closely and BMO doesn't appear to post the info.

Thanks
Read Answer Asked on March 16, 2020
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