Investment Q&A

Q: Wondering if 5i members looking for U.S. diversification might benefit from cherry picking equities from the top ten holdings of ETF funds. Not sure if there are conflicts of interest when ETF funds make their selections.
Happy Holidays!
Roger

Q: If I believe the price of oil will rise what Etfs would be appropriate to buy to take advantage of that rise in oil? Thanks.

Q: I am so glad you are now offering the same for EFTs! I just subscribed. I would value your opinion on BMO Low Volitality US Equity/ZLU & iShares S&P/TSX Consumer staples.

Thank You! Austin

Q: I have held SPDR Health Care E.T.F. XLV-N for some time. At this time, it is a hold or sell? Going forward for a longer term horizon, Is there another US ETF that I should take a position in?

Q: I was thinking of buying this ETF for my RRSP. RRP shares which are laddered - down a lot due to concerns about interest rates I assume - however, these type of preferreds would benefit from a slow increase in interest rates in Canada when that happens - rate reset means increased payouts. I think this would be a better bet than the CPD? Big potential for capital gains and get paid 6% to wait.

Q: I am a conservative retired, dividend-income investor with a pension and CPP. My portfolio includes mostly dividend-producing holdings (AD, AQN, ALA, BCE, BNS, CGX, CPG, PBH, RY, SLF, WEF, WSP, WCP, ZLB, XIT, Sentry Cdn Inc, Sentry REIT, TD Health, RBC Cdn Equity, Fisgard, and Annuities).

I am looking to add ZWH-T for income and some growth, acknowledging the T1135 inclusion and the dividends being treated as interest income. This would be held in my non-registered cash account.

Question 1 = would any dividend withholding taxes be reconciled at tax time, due to the USA-Canadian tax treaty?

Question 2 = would ZWH be an appropriate investment for my profile above? At first glance, it doesn't look like we have much foreign investments, but when you prorate the foreign holdings and/or income we have 30% non-Canadian investments (AQN, WSP are good examples). Is 30% too high for our profile?

Question 3 = I don't read anywhere about any hedging of the Canadian dollar. Am I at any currency risk?

Thanks for your help...much appreciated,
Steve

Q: Hi team. I'm trying to find an ETF that pays a dividend of 4% or more that has NO canadian exposure. The best one I have found is a new ETF called ZDH (International dividend ETF). The good: The PE is 13.3, which is surprisingly low (if you could verify), the yield is 5%, it's hedged, no holding has a weight above 2.3%, the largest sector is 27%. The bad: I don't recognize ANY company in the top 10 holdings, the MER is 0.45%, the liquidity is weak (can be a good thing when buying). Also, the dividend is above 4%, which as we've seen on the TSX this year, that often means trouble (CJR, WCP, LIQ, WIN, TMC, D.un). Would you recommend this to someone 1 year from retirement? He would give it a weight of 15%. Please take your time to respond. I'm in no hurry. Just want to be extra careful on this move since it applies to my dad. Thank you and great work!

Q: Hello again gurus!

I am interested in increasing my US holdings.

I presently hold the Vanguard Total Market and like its very low MER. I intend to add to my US holdings. What is your opinion of the BMO's ZWH?

Would you suggest that I simply add to my Vanguard Total Market Fund or put my new money into something like ZWH which, while it has a higher MER, also has a higher dividend?

Either way, I intend to buy and hold the ETF's.

Thanks.

Q: You have XHY in the Income Portfolio. It has not performed well overall. I did a graphical comparison with ZWH and ZWH looks far superior. ZWH has increased in the last year whereas XHY has gone south.

I'm thinking of selling XHY and buying ZWH. May I have your thoughts on this move?

Thanks ... Ron

Q: Is there a significant difference between CBO and the Vanguard short term corporate bond ETF in your income portfolio? Joe

Q: Is this a good defensive ETF? It seems to go up some when the market goes up, and doesn't seem to fall when the market falls.

Q: If I anticipate a rise in silver prices would this ETF be a good purchase and hold till silver has risen. Any other thoughts on this ETF. Thanks.

Q: With all this talk about climate change could you suggest few ETFs that will benefit.

Thank you

Q: The Globe had a link to an article that described US shale oil producers as facing a "debt bomb" due to low oil prices, declining cash flow and high debt. The article predicts a serious meltdown in the first half of 2016. My question relates to the impact this could have on US banks? My ETF has been doing ok, and I expect banks to be favoured by rising interest rates. I suppose this question could be extended to other commodity areas and Canadian banks as well. Do you see significant risk in banking in the near term due to debt failure? Thanks

Q: Can you explain why U.S. preferred share ETFs like PGF and PFF have considerably outperformed their Canadian counterparts such as CPD and ZPR ? Thanks, Joe

Q: Good morning,

Further to my question on the 2 covered call ETF's of BMO. I have just learned that ZWA is currency hedged and ZWH apparently is not although it trades in Cdn dollars.. Does that affect your response. I really prefer the dividend growers but not sure of the impact of the un-hedged ETF. I would appreciate your input.

Ted

Q: I am down about 20% on CPD which I bought primarily to stabilize my diversified portfolio. It comprises about 3.5% of my portfolio so it has not been a particularly good stabilizer. I understand how the rate reset preferred shares held in the ETF have depressed its value, but I find it hard to predict what is likely to happen over the next few years. Any predictions? I have been thinking of slowly reducing the amount that I hold and switching into a bond ETF (though even CBO and HFR have been slowly declining). Your sage advice would be appreciated.

Q: good morning....hap snedden recommended this etf...I like to put away money in my rrsp everytime that I have a years income in profits...I am 6 years from retirement and would this be a good place to store future income until needed...thank you for a great service.

Q: I hold some XHY in my margin and TFSA. The Canadian dollar has come down since I purchased about 2 months ago. The prediction is for a lower dollar. How risky is this downward slide , should I sell now? I just bought for the increased yield.Thank you,Phyl

Q: Hi 5i,

I have held ZWA in our RRIF,s for income for a couple of years. Recently added some ZWH which has a higher yield. Both are doing fine. What would you think of using just ZWH for the higher yield? These ETF,s do not represent total US exposure. Most US is held in other accounts.
Best regards, and thanks for your service.
Ted