Investment Q&A

Q: Peter .. is this the proper symbol ?? Also the selling of Surge ...does this mean you have lost all confidence in the bounceback or is the timeframe for recovery to long.

Q: hi folks. This was recommended on Bnn.MPG. Has it got some new news? alsoI notice you never discuss Splv and has been so good to me. Why ? Thanks in advance Cliff

Q: Preferreds have had a rough ride with some pundits suggesting that the rate reset preferreds are driving the declines in an ETF like CPD. My understanding of the argument is that resets are occurring at "unexpectedly" lower rates and that future yields will be lower. The Globe had a pretty negative article the other day which seemed to suggest that rate resets are too complicated for retail investors to understand. I didn't really think the rate reset concept was all that complicated but perhaps I am daft and don't really understand them. My question for you is what happens when interest rates start going up? If issues start to reset at higher than "expected" yields would this have a positive impact and start supporting the price of an ETF like CPD?

Q: I was looking at your new portfolio and had one question about the ETF. I own URTY presently, is it similar to the fund listed?

Q: Hi again! Doing my portfolio review so I have a few questions. Trying to increase my exposure to fixed income, what would you recommend?

Q: Just noticing CPD is at its 52 week low, also ZPR close to its 52 week low. Are they a good investment for income and if so when is a good time to buy them? Thanks

Q: What is your opinion of HEP for exposure to gold. Do they really pay over 10% dividend and can they maintain it? I have 1% allocation and planning to add to it.
Thanks

Q: What do you think of WXM? Seems like an interesting way to get a Canadian index etf with a momentum overlay. Performance has been very good even in the face of the oil and gas meltdown on the tsx. Is this kind of strategy proven to work over long periods of time or is it a flash in the pan? Thanks for the great service.

Q: what good cash vehicles would you recommend that are liquid and available in discount brokerage trading accounts.I currently have a large cash position as I have zero weighting in financials and oil and gas and don't expect to deploy these funds for 6 months or more.
Reading the questions there seems to be much discussion of $65.00 oil,with the reserve increases that I am monitoring,$35.00 oil seems a more realistic target.What are your thoughts?

Q: i want to invest in Europe. i think the best way for me is with an etf. could you recommend some. looking more for capital gain but income is always a good thing.

Q: could you up date . i am thinking of buying yd 12.8% when interest rates go up later this year will the 1/4 to 1/2 cause this price to go down a lot?

Q: Hello 5i. I've been trying to increase our diversification outside Canada via ETFs and low(er)-MER mutual funds in our RRSP accounts. Have made a start with the following ETFs: ZSP, ZDY, XSU, CUD and CYH. Also have the BNS NASDAQ Index Fund (BNS397) as well as the Mawer Global and Global Small Cap funds (MAW 120 and MAW150). These holdings currently make up about 14% of our equity portfolio (which is in turn about 60% of our total investments ... the balance is fixed income). We are both in our 60s and retired.

I would like to continue this trend but am unsure which additional ETFs and/or funds make sense for good diversification e.g., more global and/or US, or more specific like Europe?

Could I impose on you to offer a few suggestions, preferably available through Canadian fund providers? Thanks, and hope you have enough information here to suggest some ideas.

Q: Hi 5i: Thanks for pointing out the BoC interest rate hike as the cause of the increase in CBO price. I had actually just realized that as I read the ROB magazine over lunch. But it is interesting that a significant increase in the CBO price seems to have started in late December/early January. Poloz is quoted in ROB saying "... the possibility of a rate cut had begun to enter markets in the last couple of weeks." I didn't think that was supposed to happen.

Q: Hi 5i: I've decided to add some more fixed income to my portfolio and was checking on how my CBO has done over the last year. I note that it jumped very sharply on Jan 20/21 of 2014. I can't recall what triggered that leap, which is visible in other bond ETFs also. Do you have any record of what the event might have been? Thanks.

Q: Hello 5i Team, first of all I'd like to say that this is a very valuable service. I wish I'd found it much sooner.
I'm in the process of moving our RRSP Mutual funds to a self directed account at my bank. The plan is to create a balanced diversified portfolio using ets's.

30% Fixed Income - XQB
25% Canadian - XIC
25% Us- XUS
15% Europe - XEF
5% Emerging Markets - XEC

(or something similar - not sure yet if I'm going with BMO, Vanguard or Ishares)

Or would it be better to choose sector specific ETF's such as Financials, Health Care, Industrials ect.?

Also would you recommend waiting until after the summer (sell in May and go way), buying into the market all at once or buy in 1/3rd chunks over a period of months.

Thanks you very much in advance

Q: Hi Peter and Team,
If a person was opening a TFSA with $5000, future additions of $200 biweekly and had no other holdings, what would be your recomendation. Low fee mutual funds, ETF's?? Canada only or something with international exposure? Thanks

Q: Can you suggest a good health sciences ETF.
Thanks

Q: In response to your answer to Indra regarding ZSP vs HXS, I just have a follow-up comment:

HXS uses a total return swap to replicate the S&P 500. This should allow for more accurate tracking and better tax efficiency. HXS does not receive any dividend distributions so unitholders will not be subject to tax on foreign income or any withholding tax.

Any distributions by the stocks in the index are included as part of the total return swap, so a unitholder would not miss out on the dividends. This increases the tax efficiency of HXS since the only taxes paid would be capital gains tax.

This increase in tax efficiency should also outweigh the negligible increase in MER compared to ZSP.

See http://www.horizonsetfs.com/Pdf/FactSheets/FundFactSheets/HXS%20Fact%20Sheet.pdf for details.

Q: Wondering what your thoughts were on VAB and XQB as alternatives to CBO? Or as part of a bond portfolio including CBO? Vanguard reduced fees last year and XQB looks interesting. Goal is to get between 3% and 4% return (yield and +/- capital) with low(er) risk. Thanks

Q: Can u give your opinions on which is better and why or an alternate suggestion ? Can u give an opinion for a 3 year hold . Am I interpreting this correctly as a play on the S+P 500 instead of SPY?
I would prefer to use can dollar to purchase vs US dollar
A past question / answer mentioned Zsp and Zsp.u What is the difference ? Thank you