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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 am interested in increasing my US content, but do not wish to purchase directly from the US. I am looking for some Canadian ETFs based on US Equities to add to my otherwise balanced TFSA for a 5yr+ hold. I currently hold ZWH. Wondering if you could give me your top 5 picks for growth. I would be interested in your best suggestion to play FAANG stocks as well in a Canadian ETF..
Read Answer Asked by KEN on March 07, 2019
Q: Hi Team,
Could you suggest one or more of ETF/s for US Tech sector/s, either in US$ and or C$. for long term holding.
Thanks as always,
Regards, Tak

Read Answer Asked by Tak on March 07, 2019
Q: I have read here and elsewhere that that VEE does not hold stocks directly, but rather via its US listed counterpart VWO. However, I can't find any confirmation of this on the Vanguard side or in the VEE prospectus. The Vanguard Canada page for VEE implies that stocks are held directly. Can you please confirm that this is in fact the case? Thank-you.
Read Answer Asked by Stephen on March 07, 2019
Q: Like many here I suspect, we missed the cannabis event completely. Fearing to be too late, trying to ascertain whether to enter via an ETF like HMMJ (the only one I can find with any kind of liquidity) or do I try to build a small "equal weight" holding of the 5 or 6 stronger entities in this space. So how would you rank today the top 5 or 6 entities trying to build a presence or should one try to follow on the coat tails of an established company trying to enter the cannabis space like ATD.b or one of the liquor companies?
Read Answer Asked by William Ross on March 07, 2019
Q: Hi 5I team.

Other than XUS (15%) I really do not have much exposure to US Stocks. Would you please recommend a few US stocks or Sector based ETFs to invest about 10% of new cash. I have a few options based on Mad Money and Market Call. Any preferences of the stocks I've listed or other ETF suggestions would be helpful. My horizon is for 5+ years.

Thanks


Read Answer Asked by Abhishek on March 06, 2019
Q: I am a recent subscriber to your ETF newsletter. I find it very informative. Thank-you.
I have read with great interest your articles about tax efficiency of ETFs. I have two questions: (1) If a US ETF is held in a non-registered account, I understand that there is a 15% withholding tax on dividends. However, is this withholding tax not deducted from Canadian taxes payable? If a person is in, say a 40-50% tax bracket, how big an issue is this on an after-tax basis?; and (2) Where can I find out the tax impacts for each ETF before I consider making a purchase?

Thank you again for all of your excellent advice.
Read Answer Asked by Dale on March 05, 2019
Q: I hold VSP Vanguard S&P 500 Index ETF (CAD-Hedged) in my RRIF. I am confused by the following comments in the February 2019 ETF & Mutual Fund Update under the title Exchange-Traded Funds for Your RRSP – “When it comes to Canadian-listed funds that hold U.S. equities or hold U.S. listed ETFs it is best to avoid them because U.S. dividend income is taxed on your behalf.” I had thought that VSP was appropriate for RRIF’s. Please advise.
Read Answer Asked by Nadine on March 05, 2019
Q: Hi Peter,
I really enjoyed your appearance recently on BNN. I like the fact that you appear without notes, printouts, “model” prices or table-pounding buys, unlike some of the other guys.

I read your FP article on the weekend on asset and sector allocation. I agree 100% with getting the sector right - just look at commodities over the past many years. It is the larger asset allocation question (stocks vs. bonds) that puzzles me. For me, I am an equity guy and typically run 90-100% equities for better long run returns. Any remainder is cash looking for new opportunities.

I have never in my life bought a bond (or bond ETF), unless you count CSBs 40 years ago when they were at 12% plus; rates we will never see again in our lifetimes. I understand bonds for reducing volatility in your portfolio. Last fall showed the volatility of an all equity portfolio. Yet today, we are making a nice recovery. My question is if or how do bonds enhance your returns?

In Warren Buffett’s recent interview on CNBC, he said that given a choice of holding a 10 year government bond versus holding the S&P 500 for 10 years, he would buy the S&P in a second. He said the same thing for a 30 year comparison. I just can’t get comfortable with the idea of holding bonds to enhance your returns. If the primary advantage of bonds is to reduce the volatility of your portfolio, then I am fine without bonds.

Thanks again for your insight.
Dave
Read Answer Asked by Dave on March 05, 2019
Q: Hello, curious as to your recommendations for my TFSA. I currently hold all stocks in my RRSP, and a mix of mutual funds and etfs in my TFSA. I will soon be making a new TFSA contribution and must decide between adding a new name or topping up existing holdings. Funds likely to be held for a few years. Current holdings, in equal parts are
ETF's RIT, XWD and ZQQ, mutual funds include Fidelity Far East and Canadian Growth.
Have thought of HMMJ as well as TDB 3098 as possibilities.
Your Thoughts Please and Thanks. Lavern
Read Answer Asked by Lavern on March 05, 2019
Q: Preferred Shares

Upon reviewing the holdings of the four (4) largest preferred share etf, I have noticed the majority of preferred shares are issued by the banks, insurance companies, electrical utilities and pipeline companies. I am a holder of the common shares of the same companies (as they are stable long term dividend payers).
The first question I have is am I increasing my "company" risk by holding both common and preferred shares of the same companies? Should I continue to buy the common shares, which are paying very close to the available preferred share yield and gain long term from dividend increases.
The second question is of the four etf listed, which is your preferred etf. Are there other Canadian Dividend eft I should look at?

Thanks in advance for your excellent service.

Stephen
Read Answer Asked by Stephen on March 05, 2019
Q: Dear 5i
When i look over the summary page for an ETF at Yahoo finance and Morningstar i see many stats on the ETF including but not limited to 12 month yield and expense ratio .
Firstly is the stated yield on that summary page generally net or gross of the expense ratio ?
Secondly whether its Yahoo finance , Morningstar or the free version of Bloomberg the yields and expense ratio numbers largely vary . Whats your recommendation for which site to use to more accurately reflect the real numbers ?
Thanks
Bill C
Read Answer Asked by Bill on March 05, 2019
Q: What are the best ETF options to invest in the UK FTSE 100?
Read Answer Asked by Ciaron on March 05, 2019
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