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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,

I am considering buying a CAD-listed ETF such as XAW or VXC. Could you advise which account (RRSP, TFSA) I should hold the purchases to avoid or minimize withholding U.S. taxes on any dividends? I recall reading that buying a CAD-listed ETF of US/International stocks would not be sufficient to avoid US withholding taxes on any dividend. I am not sure if this statement is indeed accurate.

Thanks
Read Answer Asked by Vir on June 05, 2017
Q: In order to avoid individual stock risk, my wife (retired) has asked my opinion on investing 30% of her total portfolio in 10% each of Canada, Europe, and the U.S. (The remaining 70% is composed of 5-year laddered GIC's) I have suggested the following... Canada would be broken down into ZWC and CDZ (on a 40/60 split), Europe would be broadly broken down into ZWE and XIN (40/60 split), and the U.S. would be broken down into ZWH and CUD (40/60 split). What do you think of this strategy? Would you recommend different ETF's to balance the covered calls for the three geographic areas? Thanks!
Read Answer Asked by Paul W on June 02, 2017
Q: A comment on ZST. The annual distribution looks good indeed at around 3.7%, but the weighted average yield to maturity is reported as 1.49% and the annualized performance is just 1.63% over the last three years. This asset has lost around 2% on its price every year. And capital losses yield lower tax benefits than taxable other income gains. One can do better on a net basis with a GIC.
Read Answer Asked by Philip on June 01, 2017
Q: Hi - I recently came into some cash - and am looking for a safe place to park it and hopefully earn a little more than a GIC. This ETF was in Rob Carrick's column in Globe&Mail a few weeks back - it has a dividend of approx 3.7%. I am wondering what the downside is.. I know it is interest rate sensitive, also trading is light. What are your thoughts and do you have any other recommendation?
Read Answer Asked by Julia on June 01, 2017
Q: Dear 5i
Can you confirm the following yields and MER`s for the following Bond ETF`s;
CLF yield 3.04% & MER .17%
CBO yield 2.91% & MER .28%
CPD yield 4.54% & MER .51%
XHY yield 5.47% & MER .67%
Thanks
Bill C.
Read Answer Asked by Bill on June 01, 2017
Q: Can you provide some data points around dividend "growers" companies and if not available dividend companies in general. Current P/E forward looking vs. historic average and ranges. Just wanting to get an idea on how much higher than the average these stocks are currently compared to historic levels, how overvalued they "may" be to help assess downside risk. Thanks!
Read Answer Asked by Husseinali on May 31, 2017
Q: Good afternoon,

I'm thinking of replacing individual stocks that I've held for a long time in my RRSP with either XAW or VXC for the foreign portion of the RRSP portfolio and adding XIC or XIU for the Cdn portion of the portfolio. Is this a good idea and if so which would be your preference and recommendation. Thank you.
Read Answer Asked by Francesco on May 30, 2017
Q: A former financial advisor friend of mine tells me to be cautious regarding ETFs in a downturn because they have not been tested yet. He informed me that the sale protocol is different between selling a mutual fund vs an ETF and that the ETF could be more volatile. So far I have found both to be less volatile than simply holding stocks which to me can move up and down much more rapidly. For example: PKI moves significantly from time to time while FAI which holds PKI among other stocks moves up and down marginally due to the variety of stocks held. That being said, if there is a strong correction would a mutual fund be a better hold than an ETF of similar holdings?
Read Answer Asked by John on May 30, 2017
Q: It seems like the places to be near and mid term are US and Europe for growth and not Canada for the time being. I have exposure in Canada already with Utility and Financial dividend payers which I will continue to hold, could you recommend your favorite ETFs for some exposure to US, Europe and possible Emerging markets if you like the EM.
Also, could you comment on the "Hedged to CAD" ETFs---It seems to me we trade ETFs like stocks through our brokerage accounts in CAD, so why worry what the ETF managers are doing as far as currency is concerned?
Read Answer Asked by Randy on May 26, 2017
Q: Hi 5i. Trying to improve sector allocations. Currently we have only 3.5% in Industrials.
I am looking at XGI - iShares S&P Global Industrials (CA$ hedged). This ETF has only 1 holding which is EXI - iShares Global Industrials US$ ETF. We are looking at investing CA$ funds and don't wish to convert. Questions :
- Do you think that XGI has sufficient size (current net assets ~$40M) for an investment ?
- Do you know if there is an "un-hedged" version of XGI ?
- Do you think that somewhere between 10 and 15% should be allocated to Industrials ?
- Any other thoughts on a Global Industrials ETF ?

As always, thanks for your help. Much apreciated. T
Read Answer Asked by Terrance on May 26, 2017
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