Investment Q&A

Q: Peter.
Prior to subscribing to 5i I got this recommendation and or suggestion from BNN. It did not take long for me to go underwater for some reason. What ever MER there is on this, is all on top of my losses. Is there anything good about this holding, should I keep them for the long term. My age is becoming a factor now. It is starting to look that some of these suggestions and recommendations go short after a bit. Is this all my imaginations or is there something to it?

Q: Good Morning
I have a very small Oil & Gas holding and would like to gradually raise my holdings to approx. 10%. I am looking at using XEG & ZEO in equal weights. Would you recommend this strategy or do you have an alternative?

Thanks to the hard working Team

Q: Peter and Team,

Of my invested assets, I currently have 2.5% cash, 5% bonds (CBO ishares ETF), and 92.5% in stocks. The stock portfolio is diversified as I have tried to model after 5i methodology. I do have other cash outside of my current invested assets that amounts to the equivalent of approximately 25% of my invested assets.

I have been trying to increase my allocation to bonds a little bit because I like yield and feel like my allocation to bonds should be higher than it is for risk-management purposes.

My question is two fold:
1. I am 32 and wondering what allocation I should have to bonds?
2. Is there a bond or other yield vehicle that is similar to CBO that is exposed to international companies or companies that get earnings from international sources like Brazil, India, China, etc. I like CBO because it is short (less than 5 years) duration corporates.

My expectation is to trim some huge winners in the stock portfolio soon that will give me approximately 5% more of the portfolio to put into my fixed income allocation.

PS. I'd also consider floating rate stuff or things that reset with LIBOR or things of that nature as well.

Thanks!

Marc

Q: hi, what would your recommendation be for a china exposure etf. i heard a talking head say exposure to the shanghai index is best? thoughts? need something liquid too.

Q: It has taken a hit lately, likely due to fear of rates going up. Is a still ok to hold for income or should it be sold to protect capital. Thank you.

Q: Does the lower price of oil increase the risk of default in some of the holdings in this ETF? Thanks, Joe

Q: Looking at fixed income and interested in CBO. Some credit unions, however, are offering a five year GIC for 3.01 per cent. I have always heard that with bonds or gic's you will always get your money back. But, with etf's, it can be a little riskier, as you don't own the bonds directly. Essentially, i am afraid of getting bitten by a bond etf and am thinking about this relatively high paying gic as a solution. Is this a good strategy and do i really need to worry about bond etf's
Thanks claire

Q: Both ETFs have taken off significantly after Nov. 24, the opening of the Shanghai Exchange. Which of the two might have further upside potential, and are they relatively 'safe' as investments?

Q: Do you see any appreciable difference between the 1-5 yr corporate bond ladder etfs issued by i-Shares (CBO) and by RBC (RBO)? Of the two, RBO seems to be closer to a truer ladder as CBO has 36% of its bonds with >5yr lifetimes. On the other hand, CBO is far more liquid and its credit quality seems higher (RBO has 22% BBB whereas CBO has 0%). On the plus side, RBO showed less price decline in the past year compared to CBO. I would appreciate your comment.

Q: Hi 5i team,
I have a core position in ZWB for extra yield exposure to the banks which has performed very well this past year. I have more cash to deploy for yield / "lower" risk and was thinking of starting a new position in either ZEB, adding more to my ZWB holdings or ideally, . starting a new covered ETF that tracks US banks if there is one you are aware of. I look forward to and appreciate your thoughts.

Thanks in advance. Your perspectivce is always helpful / insightful.

Q: Can you please speak to CDZ's interest rate sensitivity given it is a cdn. dividend-grower ETF. So, if we do see gradual interest rate increases in 2015/16 and beyond, what are some possible outcomes/scenarios for CDZ in your opinion. Thanks.

Q: Peter and Team,

Just a follow up on the question asked by another member just a bit earlier. You suggested CBO as a good ETF for corporate bonds.

Here are my questions:
1. If you buy a bond ETF, does the ETF price go down if interest rates go up or is it unaffected because the ETF manager will hold the bonds to maturity any way and get paid par?
2. Will this offer protection against rising rates (and maybe inflation?) due to the 1-year out maturities getting rolled into new 5-year maturities ever year?
3. Is this a better choice than owning a few bond positions outright along with a stock portfolio (assume diversification)?

Just as a comment, in my ideal world, I want to buy bonds that pay me back my money at maturity and give me yield along the way. I want to preserve capital with these choices and am not trying to hit a "home run."

Thanks!

Q: For European and Japanese equity market exposure at this time, do you recommend using Canadian $ hedged ETF's or unhedged versions? What specific ETF's would you recommend for these two markets?

Thank you.

Q: My portfolio is completely dividend paying companies, mostly former income trusts. You have recommended bond ETF's for diversification in the past. Could you give me a few names? I have always had the impression that bonds have very low yields.

Q: I am interested in buying either ZEO or XEG and I have no oil and GAS stock in my portfolio. which one would you recommend and is 10% would be ok. Is there any ETF that has only pipeline.

Q: Hi Peter and 5iResearch Group,
As you have noted that interest rates will likely remain low for sometime, would you recommend using ETFs for medium and/or long-term bond portfolio positions vs. purchasing individual bonds. Also, should both US and Cdn. bonds in each/either category be purchased? Thank you. Linda

Q: re: Linda's question on DBC and the Dalio formula. Linda may want to look at USCI; in my estimation its a superior ETF/ETN.
Paul

Q: I have a TFSA and have 5k invested equally into the 5 etf xid cif chi cdz cud. I can purchase these commission free. My plan is to purchase equal amounts of these once a month. Could I please get your comments on this strategy.

Q: Hi Peter and 5iResearch Team,
In his new financial book, Anthony Robbins interviewed Billionaire Hedge Fund Manager, Ray Dalio, who recommends that 7.5% of a portfolio should be invested in diversified commodities. Can you recommend a good quality ETF that provides a diversified portfolio of commodities for a LT hold? Thank you. Linda

Q: I am looking to rebalance or add some growth to my US/foreign portion of my portfolio which is some 28% of total.
Currently have
AAPl 5.4%
Abev 1.2%
CSCO 1.5%
CX 1.8%
GE 1.7%
GILD 4.6%
NE 1.7%
PFE 2%
PG 4.1%
VIG 3.5%
Vale 1.1%
Have 3 major Cdn banks would you add C, US industrial or other stock from gains in AAPL or GILD or new funds. Thank you