Investment Q&A

Q: My 1st week as a brand-new member and I have to say, just love your site! I'm a small investor with $5000 that I would like to put into the financials, in some way. Sounds like you're not fond of the ETF commissions but maybe with this amount, that would be the best option for someone like me? Or, should I buy say, $1500-ish of 3 banks or would you put the whole amount into one bank and if so, which one? I don't really want the life insurance companies at this time and wondered if you could recommend an ETF that doesn't have them in it. I'd be very grateful for any help you can provide. Thanks so much, Peter.

Q: I'm looking for high income, be it REIT or others. Most of my funds are in USD, any recommendations for mid-high income?

Q: We have $6K to invest in our son's RESP, with a moderate risk profile. Which stocks / ETFs wold you recommend?

Q: It does not make sense to me that CBO can pay over 3% on quality bonds with a 1-5 year maturity and when I investigated a few years ago, I saw that part of the payout was return of capital. I am unable to find this information on the Blackrock site now. Can you comment on this?
Thanks

Q: BXF / First Asset 1-5 Year Laddered Government Strip Bond Index ETF

How do you feel about BXF compared to CLF? BXF is supposed to be more tax efficient outside a registered account. (I am looking at holding it outside a reg account). Are there any other comparable tax efficient ETFs?

Q: Good morning,

Looking for your opinion on this covered call ( I believe on 25% of the portfolio?) ETF, that shows a yield of over 9%.

With thanks,
Brad

Q: Good Morning: I have been reading some of the recent questions related to bond etfs. I have been avoiding bonds and using preferred shares instead for fixed income in my portfolio, slightly better yield although also struggling through 2015. I notice that the yield for the two bond etfs mentioned is roughly 3.2 (CBO) and 3.1 (XCB). (Taken from BMO Investorline trailing 12 months average payout.) In your opinion, what can I expect in terms of yield from these instruments going forward -- roughly the same, a little more, or a little less? Also, I notice (not surprisingly) that the share price for CBO is near its 5 year low, whereas for XCB it is slightly up over the same period. What would your opinion be in terms of share price direction for each over the next 2 to 3 years as well. Many thanks. Don

Q: I appreciate your comment in regard to this ETF which has done well during the last year,.ebrahim

Q: Hello Peter, I am looking for safe investment with dividends, I have ZEF in my portfolio, I would appreciate your help to rate the above, perhaps suggesting a couple better ones. Also, how would future interest rate increases effect their prises.
Many thanks, J.A.P. Burlington

Q: Hi 5i team,

Could you please tell me whether this ETF pays dividends or interest income? Until now, I have been assuming that CBO pays dividends for tax purposes, but I read an article in the Globe&Mail which states that bond ETFs pay mainly interest income.

Many thanks for the great service.

Q: Bond ETF: Of all the questions about bond ETFs, XCB is hardly ever mentioned. XCB is one of my core holdings in the fixed income portion of my portfolio. I now have additional cash for corporate bonds, would you buy XCB as a long term (10 years +) holding? I do not need the income, this is simply a portfolio stabilizer. Would you choose a different bond ETF?

Q: Covered call ETFs are gaining popularity. Does the technique have risk that isn't being talked about (yet)? It seems too good to be true. You can buy ZWA which owns 30 awesome mega-caps and has a 5.2% yield. Or, you can buy ZRE which contains companies that max their payout to get you that same yield of 5.2%. The first, ZWA, is not exposed to rising interest rates, or, to the housing mania. In that sense, ZWA seems to be a clear winner for income. But something tells me that as more firms make similar ETFs, something will happen. Won't the increase in put/call writing become crowded and a problem? Maybe fees will increase? Have you come across some writing on the subject? I'd like to investigate before putting 3 years of savings on ZWA. Thanks team.

Q: Is there a good gold ETF that you could recommend that will benefit if gold resumes its upward course

Q: What are your thoughts on this ETF?

Thanks
Dolores

Q: I own HEWJ and ZDM as my International exposure (5% of my portolio). Neither are doing well, especially after the Brexit vote and I'd like to replace them with ETFs with a more positive outlook for the next 2-3 years. Your thoughts and recommendations please!

Q: Hi Team,
I was hoping you could help explain something. I own a five-year corporate bond ladder. This year to date the value of my bonds have fallen 0.91% (which on its own is fine as I hold the bonds to maturity). I am unclear why my bonds would underperform VAB (up 3.56%) and CBO (down 0.16%) in the same timeframe.

I realize VAB has a longer duration on average than my ladder or CBO. Credit quality may be better in both funds, and mine are typically in the BBB range. But is there any other reason why bond funds should outperform specific bonds in a ladder? Is there a scenario where a bond ladder will outperform the bond funds?

Finally, is there any advantage to owning bonds in a ladder at all?

Thank you. Michael

Q: I have been wanted to diversify my portfolio and I was wondering if this is a good list or a bit of overkill. I have recently bought some XBB. I want these for fairly long positions, my concern is that I might be over paying for these as everyone is fearful and flocking to bonds as a safety net. Would it be wise to let things settle or buy partial positions in these etfs. Also would it worthwhile also owning some us long term treasuries. I am looking to try to cover all possibilities so I am not chasing in the future when market conditions change. I would like diverse group to cover inflation, rising market, recession. I know that I cant take all risk off but I would like have some safety net and not hold all equities.

Q: I am considering selling XRB. Is this a good time to hold or get rid of a real return bond index?

Q: I have transitioned a substantial part of my own RRSP from mutual funds to individual stocks & other investments, with the help of 5i (thanks! Done quite well), over the past 3 years.

My wife is still reluctant to do the same, so we are transitioning her RRSP from mutual funds to ETF's, with only one purchased so far. The specific ETF our advisor put us in was BMO ZDV. At the time, I specifically wanted an ETF with lower exposure to the energy sector.

Unfortunately, we bought in at the August 2014 peak, and are underwater by 20%, even after distributions. Moreover, the distributions have been steadily dropping since we bought in.

Is it time to bail out of this ETF, and if so, what would you replace it with?

Thanks.

Q: Hi there

I wanted some feedback about putting about 5% of my portfolio into Preferred shares for income purposes for over a 5 year hold. I know I could buy the preferred ETF CPD but have been hurt before in ETF bond funds so feel better buying two or three individual issues where I know up front what I will be getting in return for at least the first few years. Would it be possible to provide three preferred issues that you would recommend for income?

Thanks so much