Investment Q&A

Q: further to my question which you answered very quickly, thank you. The information was from your website"Business Description-
The investment seeks to track the investment results of the NYSE FactSet U.S. Tech Breakthrough Index. The fund seeks to track the investment results of the NYSE FactSet U.S. Tech Breakthrough Index (the underlying index), which measures the performance of U.S. listed companies engaged in cutting edge research and development of products and services in the areas of robotics and artificial intelligence, cyber security, cloud and data tech, financial technology, and genomics and immunology. It generally will invest at least 90% of its assets in the component securities of the underlying index. The fund is non-diversified. The Fund seeks to track the investment results of the ICE 0-3 Month US Treasury Securities Index, which measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of less than or equal to three months." I don't understand why the TBills are related to this index. Is the debt incurred by these companies comprising the index?

Q: Is this ETF less secure because it follows bonds from "breaking edge technical companies index" even though they are T-bills. If one were looking for a relatively secure Tbill ETF to gain modest income and possible currency benefits in a RRIF which would you chose.

Q: Thank you for your list of available covered call ETF's . A bit to unpack here . Could 5i give me some assistance doing it ? .....

The current Yield of each ?

The structure of each ? .... { for example part of your answer was " GDXY may be of interest. " I'm assuming some leverage here as the yield shown in TD Waterhouse is 29% . How much leverage ? And what is the structure of this and the other ETF's ? }

The risk profile of each ? ...... { for example on the Yieldmax website they outright tell you GDXY is high risk . I would like to know why and what that risk is ? And a similar assessment for each ETF recommended ? }

Also if 5i were going to hide in some high yield covered call gold ETF's until after April 2/25 { tariff day } and likely longer as I'm convinced it isn't going to be a good year for Canada. Put a numerical value for each ETF listed from one to ten with one being most favored and ten being least favored and why ?

Also if there are any tax consequences inside a RRIF ?

Thank you for your terrific service .....

Q: Just a comment with regard to RoC paid by ETFs...if there is a large inflow of new funds between the payment declaration day and the date of record that can result in RoC. For example, an ETF such as PSA declares a 9 cent interest payment with the date of record 2 weeks in the future. If the 9 cents is 100% of the interest earned but a large inflow occurs before the record date, the ETF would likely have to pay out the extra interest as RoC. I imagine this can be minimized by holding back some of the interest earned in case that happens.

Q: Can I have your opinion on this fixed income etf.
It is Blackrock first actively managed fixed income ETF.
The US version is called BINC.

What are the risks/benefits of this product.
Thanks a lot.

Q: Could 5i give a list of the various covered call gold ETF's offered and their yields ? Canadian and/or American ...... The only one I am aware of is AMAX on the Hamilton website. The yield is indicated at 9.52% but it always says that no matter what the daily unit price is. So if you could update the yield based on current unit price it would be appreciated ? .....Also are there any enhanced yield gold ETF's and if so their targeted yield ? Thanks for your terrific service . Garth

Q: Hi,
Maybe I'm late joining the party but would you have suggestions on how to invest in the European military spending that is forthcoming? Any specific stocks and/or ETFs?
Thanks

Q: Hi,

I was surprised to learn yesterday that a T3 form was provided to me from by bank for holding Purpose High Interest Savings Fund (PSA). It says there is a minuscule return of capital. I thought PSA would only provide interest as reported on a T5.

I went to the PSA website and sure enough, there is a ROC and has been since 2013. Do you know if this is typical of these high interest savings account ETFs and if there is another fund that is similar to PSA without the ROC component?

Thank you.
Michael

Q: Hello. I was going to ask you about MSTY:US, one of YieldMax ETFs. It creates synthetic long exposure, then writes covered calls to generate income. I specifically wanted to ask you about how distributions would be treated from a tax perspective as a Canadian. The distributions are options premiums. So would the distributions then be treated as capital gains, or as US dividends? I assume there would also be a 15% US withholding tax.

When I entered the symbol to ask this question, I discovered that MSTY:CA is a Canadian equivalent, although they only have 50% exposure. Do you know anything about the company Harvest? I had never heard of them. Are they an established and reputable company? How would distributions from MSTY:CA be treated from a tax perspective? Thanks for your help

Q: I am considering adding an ETF that provides coverage of assorted/balanced commodities. I would appreciate having some names that you would recommend; Canadian or USA. What is your opinion of adding a position as an uncorrelated asset to balance an all equity portfolio. I hold diversified energy holdings already (pipelines and producing companies in both oil and gas). I also hold mining stocks, RIO and AEM.

Q: This etf seems to have come out of the latest downturn without to much difficulty, so wandering what the reason for this latest performance. Is it because of the fairly low fees, or the quality of the stocks being held or is it a combination of a number of factors. I am thinking of investing in this etf for the long haul. Many tnx.

Q: Greetings 5i,

I'm looking to decrease some of my US investments and want to sell XUS (I also own VFV). I'm looking at either VIU or XEF as a replacement for XUS. Does this make sense and if so do you have a preference for either of these ETFs or would you recommend something else as a replacement?

Thank you.
John.

Q: What am I missing here? This is a bond fund with an almost 12% payout? Is this something you can put $100k in and get $12k paid out every year forever? I get that it does covered calls but it just seems too easy. It completely trashes the TSX yearly returns with far less risk?

Q: The factsheet of these ETF’s says that they have 2 and 4 million dollars of assets under management. How will these ETF’s gain popularity over the coming years and will that push the price up?

Q: I am concerned that the next few months will be as volatile as the past month as the US continues its tariff agenda. Do you think it is a good strategy to invest in other currencies. If so what is your opinion of these two ETF's. (Swiss Franc & Japanese Yen)

Thanks Stew

Q: With inflation in Canada edging up, and concerns that tarriffs are inflationary, is it a good time to move to shorter duration bonds? The counter is that if a recession hits interst rates may decrease. What is your take on the timing of all this, and how best to position a bond portfolio?

Q: Canadian HISA accounts do not have such good yields anymore. And the income is taxed as interest. I was looking at my 2022, 2023 tax returns and the revenue from canadian ETF like ZAG, XSB, XLB was mostly ROC. If I’m not wrong, thus, much more tax efficient? Wouldn’t be a good idea to switch from HISA to XSB, XBB, etc to park money in the next few months?

Do you know if high-Yield ETFs are taxed the same way (ROC) ?
USD-HISA are more generous so the logic might be different.
Thanks.

Q: Hello, looking at UMAX, the price went from 16$ to 14$ in less than 2 years. Is it because the NAV is going down because of the dynamics of covered calls? Sould we expect a steady price erosion for the foreseeable future? It’s nice to have 13+% annual distribution but if we have a corresponding capital loss, I am not sure it makes sense. Can this ever be a long term hold? Thanks.

Q: Hi Peter,
For non registered accounts, please advise your best picks for European Equity ETFs that have ample room for growth and can withstand this volatile market. Dividends are not important. I also look for Asia ETFs that have a high percentage of holdings in China and to a lesser degree in South Korea. Please advise of your best picks. Brief explanation of reasoning for these picks is appreciated.

Q: Hello 5i, I am looking at Global X DAX ETF and Vanguard FTSE Europe all cap index VE to diversify my portfolio? Could provide an analysis and recommendations for both? Thank you in advance!