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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: Hi 5i Team:
A couple of thanks first before getting to my question.
1. Thanks for the fantastic job you did on my portfolio review and the suggested transactions.
2. Thanks for your opinion and feedback on annuities.
I have some money to add to my fixed income. Are you still liking CLF for government bonds and CBO for investment grade corporate bonds. Time horizon is very long term. Or do you have some other suggestions.
Thanks so much.
Read Answer Asked by Dennis on June 21, 2017
Q: I hold the following ETF’s in a Non-Registered account. It is sort of a general purpose portfolio with a bit of emphasis on the health care sector (just because I think it is coming due). My question is with additional cash to add should I look for another ETF or add to the existing ones? I guess I am saying do I need more diversification or is there another particular sector I could emphasize?

Canada
iShares S&P/TSX 60 Index Fund

US
Vanguard US Total Mkt Ind ETF
AdvisorShares Focused Equity

Europe
Vangrd FTSE Dev Europe All Cap

Health Care
BMO EqWt US HthCare Hedged CAD
iShares Global Healthcare ETF

Emerging Markets
BMO India Equity Index ETF
Fairfax India Holdings
Fairfax Africa Holdings


Read Answer Asked by David on June 20, 2017
Q: Would you put money into biotech seasonally ? In the past I have done well on Celgene ... However , I have taken quite a hit on Gillead, so I am cautious.
Or should I look at the ETFs for a broader/safer play ?
Read Answer Asked by Thomas on June 20, 2017
Q: I have recently raised cash in my portfolio and am wondering if you could suggest a good place to park it for some kind of return over an undetermined period of time. Are money market funds still my best bet?
Read Answer Asked by Martin on June 19, 2017
Q: I don't currently have a stake in the US technology industry, and am thinking of using the recent pullback as a good entry point. What do you think of the US tech sector for a long-term hold? Could you comment on using XQQ to meet this objective and an appropriate percentage allocation? Are there any other TSX/CDN$ ETFs with large holdings in US tech that you would recommend instead?
Thank-you
Read Answer Asked by grant on June 19, 2017
Q: Hi 5i team,
I currently have the above ETFs. I find that the dividend are a bit low (~2%). I was wondering if there are alternatives to the above in the 4-5% dividend range for income?

Andrew
Read Answer Asked by Andrew on June 16, 2017
Q: In my portfolio I am overweight in Canadian Financial (Banks) and the US tech stocks, but I have no exposure to the Materials sector (except gold.) Can you please recommend me a few materials and mining stocks (in the order or your preference) or do you suggest an ETF.
Based on the recent weakness of the sector is this the right time to get in this sector? or do you suggest that you should stay away
Read Answer Asked by Jacob on June 16, 2017
Q: Good Morning: I have been raising my cash holdings somewhat in light of a prolonged bull market with high equity valuations and increasing geopolitical risk. I have some of this cash in HISA's with an average yield of about 1.7% or so. However, I am considering putting some of it into a bond etf since I don't feel I have the know how to successfully put together a ladder of actual bonds. What I would like your opinion on is what would be the best 2 or 3 options in Cdn. bond etfs for preservation of capital combined with optimal yield (recognizing that the two are almost always working in opposite directions.) Of course, if you have another option for parking cash, that would also be appreciated. (I do have some preferred share holdings but past experience has taught me that they are not immune to market corrections.) Many thanks.
Read Answer Asked by Donald on June 15, 2017
Q: To add some diversity to my Canadian holdings, over the last 5 years I've held VUS, VFV and VEF. VEF is about 11% of the portfolio. The 2 US ETFs have outperformed VEF almost 2 to 1.
My question is do you think it's necessary to have EAFE exposure? I'm thinking of selling VEF to raise cash so I'm ready for the next dip in north American markets. Thanks for all of your great advice over the years. cheers
Read Answer Asked by Andrew on June 14, 2017
Q: Hi 5i,
Just a comment on Nino’s question and your answer about the choice between paying up for a REIT ETF like ZRE/XRE versus holding 8-12 individual REITs. My choice has been the latter and I have been happy with it. Your answer suggested that rebalancing 12 holdings annually would cost $120 at $10 a pop. My experience has been that the reality is much less than that. Because the REITs tend to move as a group more than their individual movements relative to the group, in holding 8-12 decent quality REITs I haven’t had to do more than 2 or 3 rebalancing transactions in any given year. Except for a couple of extraordinary years my REITs have really been low maintenance holdings. Cheers!
Read Answer Asked by Lance on June 13, 2017
Q: VSB looks to include both government and corporate bonds. Is owning VSB the equivalent to owning CBO and CLF? Looking to reduce number of holdings and the MER on VSB is attractive. Is there something similar that includes corporate and govt short term bonds that you like better? Thank you for all that you do!
Read Answer Asked by Pamela on June 13, 2017
Q: I currently have, in ETFs, 20% in U.S. (VTI) and 10% in international (5% in VEF and 5% in VEE). I'm thinking that long term my U.S. and Int'l should be equal weight as one never knows what countries will perform the best. What are your thoughts on this and recommendations? Thank you.
Read Answer Asked by Pamela on June 13, 2017
Q: Greetings, I've always had a bit of a difficult time understanding bond ETF's or more specifically how they may be expected to react to economic events. Some observers interpreted recent comments from the BOC as perhaps indicating they may not be as opposed to a rate hike as they have been for the last 7 years. If rates were hiked even a little in Canada, I assume bond ETF's would react somehow. Does it depend on the nature of the holdings? Or is the underlying reason for the rate hike more important? Could a bond ETF ever respond neutrally (or even positively)? I think I understand how an individual bond reacts, and how if I held it to maturity it really wouldn't matter, but I am thinking specifically of ETF's like VAB and CLF. I would really appreciate your thoughts,
Thanks

Read Answer Asked by Stephen R. on June 13, 2017
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