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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: Hello,

Thank you for your very prompt response to my question concerning how this ETF is able to pay such a high distribution. I now however have a few follow-on questions.

Since you indicated that a vast percentage of the distribution the ETF paid in the past year was simply a return of investors capital, wouldn't that make the likelihood of the ETF being able to continue payment of the current high yield very suspect over a rather short period of time? If investors are predominantly receiving a return of their own capital back to them, over time, then at a rate of 9% plus per year, won't the fund simply run out of funds to make these payments with over a period of 10 or so years? How would this differ from putting one's money under the mattress and simply withdrawing 10% of it each year?

Does the Evolve Global Healthcare (LIFE) ETF also engage in this practice, in order to support its roughly 6.75% yield?

If ETFs are supporting high yields by returning investor's capital to them and if that practice is inherently unsustainable, then I imagine that including information of that nature in the answer to any and all inquiries about such ETFs, would be very beneficial to all your members.

Thank you
Read Answer Asked by Richard on July 30, 2020
Q: Looking for 2 dividend paying ETF's, one CDN and one USA with low MER.
Suggestions please, thank you
Read Answer Asked by darcy on July 30, 2020
Q: Could you please suggest a replacement for these mutual funds. I have been told these funds have a high MER and I should investigate other options. A switch to ETF's may be an option too.
Read Answer Asked by Terry on July 29, 2020
Q: Hi, could I please have your view on this ETF. It is small in AUM but seems to have a lot of underlying holdings. Wondering if these holdings are relatively mature stable companies (for China!) like utilities, telcos, banks etc.. Would you consider the distribution relatively stable? Also is it currency hedged to the Canadian $. Thanks.
Read Answer Asked by Gary on July 29, 2020
Q: Hello 5i,
I'm currently holding a 2.44% position in XGD etf. I would like to add 2.5% to either a junior gold etf or gold bullion CGL.C.T. My concern is has gold climbed to rapidly. Should I wait for a better entry position. If you have other gold buying suggestions or not, please add. Thank You. Walter
Read Answer Asked by Walter on July 28, 2020
Q: Could I please get your thoughts on this ETF as a potential LT hold. I like the idea of having a diversified way to invest in the Blockchain space but I am concerned that it's strong run since April means most of its holdings are overvalued. I did find somewhere that its P/E is around 19.5 which wasn't as high as I thought it might be.
Read Answer Asked by Morgan on July 28, 2020
Q: These US technology ETFs seem to focus on smaller cap/growth oriented stocks; what are your thoughts on these to complement “FANG” focussed stocks/ETFs?
Read Answer Asked by Dan on July 28, 2020
Q: The bond portion of my portfolio is equally weighted between CLF and ZAG. With CLF having a government bond and shorter term focus and ZAG having a corporate bond component and longer average bond life, would it be sensible for someone with a medium risk profile to sell CLF and consolidate the bond portfolio in ZAG to take advantage of the higher interest return?
Read Answer Asked by Ken on July 28, 2020
Q: Hey guys,

We already own DXG, would you recommend any others instead of DXG for international exposure? Also, a full position on individual stocks is between 4 to 5% (hopefully letting them grow to 7 to 8%, ), what about etfs?
Thanks
Read Answer Asked by jim on July 28, 2020
Q: Don't see any questions on IDRV which is an ishares ETF focusing on self driving cars and automation of vehicles. What are your views apart from its newness and small market capitalization.?
Read Answer Asked by William Ross on July 28, 2020
Q: Further to the question related to the dividend cut for CDZ, is it safe to assume the cut is related to the associated dividend cuts from the underlying securities? And if that is true, then can we assume that once these securities reinstate their dividends, then the CDZ dividend will, in turn, rebound?

OR, is it a case whereby the ETF is periodically reconstituted and it is a fresh start for the underlying securities and we have to wait for the natural progression of dividend increases related to these "new" underlying securities? In this case how long does an individual security have to be "off-side" to be turfed from the ETF?

Thanks for helping me understand...Steve
Read Answer Asked by Stephen on July 28, 2020
Q: I am looking for an equal weight, cad hedged Etf’s focused on any or all of the following:
- nasdaq 100
- s&p 500
- technology / IT

I hoping something exists. I’m worried about Over concentration in fang stocks but still love the sector they are in. I also think the USD dominance is coming to an end. Thanks
Read Answer Asked by Scott on July 27, 2020
Q: Hi team
I am looking to start a position in global value ETF fund; I am looking at the above
VVL; I already have some exposure in International through the Mawer International funds
could you recommend one more ETF similar to VVL ?

thanks
Michael
Read Answer Asked by Michael on July 27, 2020
Q: Hello,
recently I was listening to an interview of a portfolio manager of Artemis Capital. He was discussing portfolio construction and allocations to different types of investment classes.
His firm did research over an extended period of time and they devised an allocation model which performed the best over the time frame. The main point of the interview was diversification which would be in line with what 5i keeps saying time and time again when reading replies to member questions.
Having said all that, there is one point they made which I did not follow to well and would like your view on. They indicated that they would allocate a portion of a portfolio to volatility. Anyway, I did not understand and would like to know what they meant by this. They were talking about options so is it basically using puts and calls?
If you can expand on what would constitute investing in volatility and perhaps give a few examples i would appreciate it to help my understanding of this concept.
Thanks,
Dan
Read Answer Asked by Daniel on July 27, 2020
Q: Just reading about the new limited resource capital notes (LRCNs) that RBC is issuing to institutional investors at 4.5%. Since these pay interest, they are better for the banks than equity because they can deduct interest payments but not dividends. For investors, dividends are preferable from a tax point of view but I am wondering if banks are going to try and reduce traditional preferrred share offerings and issue more of these LRCNs. This is probably why preferreds have gone up recently. How do you see this playing out?
Read Answer Asked by Maria on July 27, 2020
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