Investment Q&A

Q: What can you tell us about structured notes and any recommendations?

Q: Dear 5i,
Many experts are suggesting that Bonds are very attractive right now because of the high yields.
Can you please suggest some Canadian bond ETF's and Mutual Funds that one might want to do further research on. In your opinion what duration range represents a sweet spot that might offer attractive total return within 3 years.

Q: Good Morning ,

Could we have your opinion on this new listing from Harvest. Also do you see their risk evaluation as accurate (medium-low). Thank you.

Q: I recently noticed that I had been given Rights by Constellation software which ended on Sept 28. I have done nothing about these Rights, so will there be any consequences, tax or otherwise that I did not exercise them. I am confused what these Rights meant and I had not looked at my account for a while, so I must have missed the information. Can you explain what I should have done and if there are any tax consequences of having done nothing. Thank you

Q: Hi there, with all the buzz about fixed income, Gics, bonds etc. I feel like maybe I should be increasing my exposure in my RRSP. I am retired and definitely have a diversified portfolio more slanted toward div paying solid equity companies.

I know you can’t give personal advice but what might be a good way to tweak my portfolio to increase fixed income exposure for 5-10 years ie gic or bond ladder, ETFs, individual bonds or?

Or should I stay in dividends and forget about it?

Ok thank you!

Q: Hello Peter and company,

With XLB hitting a new 52 week low, should I continue to take a long term view that yields will eventually be lower? I took a position in January and not sure weather to add, sell or hold. I have a 4% position with the reminder in the balanced portfolio and cash.

Thanks for the great service,
Angelo

Q: Peter; I’ve read the replies on both- what is the difference between the two - XCB seems to have performed better over the year. Thanks.
Rod

Q: Are the Extendible Notes offered by TD Bank as safe as GICs . They offer a slightly better yield on CAD GICs and over 6% on USD . There must be a downside to cause this ... Please explain

Q: Good morning, Is it a good time to invest in US corporate bonds? What would you recommend to get through these turbulent times in the market?

Q: can you recommend any Canadian or Us corporate bonds that are safe and pay a good dividend

Q: Recently retired younger couple. Need to continue to preserve and grow portfolio, but also need to secure near term income stream.

I am looking to shift some equity to fixed income and trying to decide the best approach.

I have registered and non registered accounts. The non registered account is in dividend payers, and will leave this as is. Tax treatment is good, flexibility is good, recession proofish.

I am considering changes to the setup of my registered accounts. Two main options appear to be:

1. Move an registerd account from the current discount broker (Questrade) to somewhere like EQ bank and buy laddered GIC's. Advantage - CDIC protection, maybe very slightly higher rate of return. Disadvantage - Admin pain, loss of flexibility

2. Stay with current discount broker and simply move into CASH.TO

I am strongly leaning to option 2 - am i missing something here?
Why would i go to the trouble of option 1?
Are there other (better) options?
How big of a risk is there with something like CASH not having CDIC protection?

Thanks,


Jim

Q: What do you think of Denison Mines in terms of valuation/leverage to higher uranium prices/balance sheet/risk? Rick Rule called it a no-brainer and said if their leaching process works it could be a big home run. Curious to hear your thoughts.

Are there other names you prefer to gain exposure to rising uranium prices?

Thanks

Q: Hi With respect to Steve's question, about Series 1 debentures trading at $136-$138 currently and applying for new debentures through Rights for a price of $133, is it not true that Debentures currently trading also have an embedded additional value of $3.25, quarterly interest ( $3.25x4=$13.30 annual), payable on October 1st. Whereas, the debentures acquired through rights will be issued only on October 6 and are not eligible for that interest for quarter Jul-Sep and hence the price differential ?

Thank You

Q: Peter,

A bond fund will have a duration. I was told by a rep at the $$$ show that it can refer to the percentage change in value of the fund when interest rate changes. IE if duration was 3, then a 1% change in interest rates will create a 3% change in the value of the fund. Is this true?

If this is not true then please explain the proper meaning of duration.

Thank you

Paul

Q: As I write this the CSU.RT debenture purchase rights are trading at $.005 and the series 1 debentures are trading in the range of $136-$138. If my math is correct, for a few pennies worth of the rights one can purchase $100 face value of the debentures at $133 which is a $3-$5 discount to where they are currently trading. Is this a no brainer or am I missing something? Why are the CSU.RT rights trading so cheap?

Q: Hello 5i, common question for you but I have very little bond exposure and was looking to start building a fixed income portfolio. Can you give me your current top 5 bond picks (assuming ETF's). This can be USA or Canada bonds.

Q: Hi, We are applying to buy some Constellation Series 1 Debentures through rights, with a payment of $133.217, for family members. Where would it make most sense to hold these debentures - RRSP/RRIF, TFSA or a Non Regd Taxable account. ( Most of us being in higher Tax bracket of 40-54% Marginal tax rate ). considering the following:

1. These debentures will likely yield anywhere between 5-10% ( on a cost base of $133 ), by way of Interest income, for 17 years ( assuming we will be able to swap with warrants, if called before redemption)

2. We will incur a Capital Loss of $33 as at March 31, 2040. ( $100 Principal to be received at maturity)

3. If held in Tax sheltered accounts, would it make sense to move them to a Non-Regd Taxable account, let's say 5 years before maturity date, when the M/V of these debentures will likely start declining. So, we could use the Capital Loss in Taxable accounts.

Thank You

Q: "We don't quite match the market in good years but will lessen your losses in bad years" say many portfolio managers to clients in exchange for a 1/2 to 1% management fee.

But, over the years, since the market has had significantly more positive years than negative years, I feel this is a good argument to just purchase some very low-fee ETFs, once you've determined your asset and currency mix. Less fees, therefore more money invested and therefore little value add from the advisor! Your comments please.

Also, I am a 65 year old retiree with a high 7 figure investment portfolio who will not run out of money. I favor a balanced portfolio of 80% equity (with a slight tilt to growth) and 20% fixed income. I also favor a 50/50 split between US and CAN dollars.

While I realize you cannot provide individual advice, which low cost ETFs should I consider?

Q: Sorry but another question on CSU.db
It appears that only CSU shareholders will receive the warrants for a potential swap. I have a friend that holds the original debentures and they did not receive any warrants for exchange? Why would the shareholders receive warrants ( they don't need them) and the original debenture holders not receive warrants ( they will need them)?
Secondly on the rights , 3.03 rights are required to buy $100 face value, is it fair to say its actually 4 rights then? Fractional rights won't be allowed?
thanks

Q: Sorry for another questions about the CSU rights, warrants and debentures. I was thinking of taking a small position in the debentures and have the rights to do that. However, I believe that I would be getting the Series 1 debentures which likely means that I will someday have to buy warrants to remove the redemption feature. The cost is now starting to increase because I am not sure there will be enough warrants to cover the Series 1 debentures so the warrants could be expensive. It seems to me that if CSU wanted to remove the redemption feature they could just do it without the warrants. Will there be enough warrants to go around? And if the warrants sell for $1 that is another 1% lost. Any further comments?