Investment Q&A

Q: I have already asked a question about this security. Thanks very much for your answer regarding the payments being interest and not dividends.
I just can't understand this security. It is an inflation linked bond with a maturity date in 2040. The new year's interest rate has been announced as 13.3% based on the 100 bond price. The current face value has declined over the last week even though the interest rate has gone up by just over 2% per year. The current rate on face value of 137 is 9.7%.
I know about the thin trading volume and the potential for Constellation to redeem the bond with 5 years notice.
What am I missing?? Is there a good reason not to put a fair chunk of fixed income destined money into this debenture?
Thanks as always for your insight!!

Q: R.E. Royalties has 9% secured green bond coming available. How secure would this company be?

Thanks
Dick

Q: With interest rates rising and bond yields now almost at levels worth looking at I want to start adding a few bonds to my portfolio. Obviously the easy thing to do would be to buy a few of your recommended bond ETFs but I would rather buy and hold individual bonds over bat for the average with an ETF. Can you recommend some good reading material on the subject of building a self managed bond portfolio. I understand the basics, looking for a slightly more advanced guide for a DIY investor.

Q: To full fill RIF withdrawal obligations, I am seeking high yield vehicles and found HYI, ZHY and ZJK, they all have above 6% yield. HYI is called active high yield bond ETF even has 7.33% yield. Does active high yield more risky than other two? What do you take on these ETFs if you are a yield seeking investor? Thanks. Lin

Q: Hello,

What is the difference between PSA and CASH?

Also, I own ZCS and CBO and was wondering if I should increase my allocation to CASH and PSA while reducing my allocation to ZCS and CBO considering the higher rate (better yield) on the short end of the curve. It seems to be higher income / lower risk strategy. Can you please provide your comments. Thank you.

Q: Bond market drives the stock market.

I keep hearing this message. Would you please provide a explanation of why this is the case ( if you agree) and how this works. And WHO are the drivers of the bond market.

Thanks as always.

Q: I have some cash that I was thinking of putting into PSA or CASH for the shorter term. But I am wondering if the unit price of those may drop suddenly when the market turns bullish, and investors move back into stocks. So, well I may earn a nice yield, I could lose some capital. Is that something I should worry about? Thanks.

Q: Last week Horizons issued press release indicating they were suspending new subscriptions after reaching approx. $US 775 million in assets.
The release says that “ during a period of suspended subscriptions , the Manager expects the shares of HSUV.U to trade at a premium to its NAV per share . While new subscriptions are suspended , Horizons ETFs is strongly discouraging investors from purchasing shares of HSUV. U “ .
As of today , the price and NAV are within a few cents of each other.
How should this press release be interpreted ?
Is it just a formality ?
Or should you be listening when Company issues a caution on its own product ?
Thanks.

Q: Hi
What is the advantage of holding an ETF like CASH or PSA Instead of a money market fund such as TDB8150?
The latter appears to pay a much higher interest rate (3.8%).
Thank you.

Q: Where would you suggest to store cash in a US$ account for daily or 30,60 or 90 days?
Thanks again

Q: I noted and likely your strategy to add to XHY for income and possible capital gains. However, when I looked at high yield corp. bond ETFs, ZJK looked better overall. There is also the matter of CAD hedging. I'm looking to park cash for my 2023 RIF withdrawal this December and I've been using the BMO HISA for this. Can I have your opinion on using ZJK or XHY instead for about 2% higher income?

Q: I'm looking at my legacy pile of preferred shares of which I have never been fond and wondering if this isn't a good time to sell and invest in a bond ETF such as XHY. I know you have expressed ambivalence about prefs but have also said in better times the class can do better. However, yields are roughly comparable, I can use the loses and invest the proceeds in XHY or a different bond fund which you might suggest, keeping the investment on the fixed income side of the page, Many thanks. al

Q: Can you recommend a high interest savings account that trades on the US exchange that is to equivalent PSA-T. I tried using the PSA.U-T in my US account but my trading account wants to convert the US dollars to CDN. Thanks.

Q: I’m looking to put a fairly large cash position to work (my portfolio is 30% cash) over the short term and would like to atleast gain some income (while I wait for a short-term recession scenario to play out) but limit large equity exposure. Can you give some short term bond etfs or some liquid traded products that would serve that purpose. I own a large position in zwb already but realize I’ll still get dinged in a pull back (at which point I’d shift that position back into underlying bank equities for a recovery). And also what kind of yields would I be looking at? I also would like to be paid out atleast monthly. Thanks

Q: Can you please recommend your favourite yield products for stability and income?

Q: My broker has suggested I look into National Banks auto callable note securities (mature monitered Barrier) linked to the Solactive Canada Bank 40 AR index. Issuance date is Monday January 13. Its a 5 year note callable semi annually. Returns seem to be very good. I have absolutely no experience with callable notes and would like your opinion on this note. I am told that if the shares of banks go up in the next 5 years it is a good investment.

Wayne

Q: If one believes the 2 year note yield will fall, what are best ideas to play this scenario?

Q: Hello,
Many experts are predicting a downturn in the market for at least the first half of 2023 and possible even longer. With that in mind, and if the Feds and Bank of Canada pause in Q1,... the market will stabilize and GIC rates may pull back. In fact RBC GIC's short term rates are about the same as longer term. Therefore, is this a good time to start buying Bonds ETFs with the hope that as rates start coming down the stock price will start moving higher? Am I correct in this assumption? And, which ones would you suggest? short, mid, or long term.? As well, what are you thoughts on Prime Linked Cashable GIC's ( offered by RBC)? Finally, would you buy a 1 year GIC currently at 4.65% ( by RBC) ?
Thanks
CR

Q: Hi Peter,

In 2023, when do you predict would be a good time to move from money market funds to bond ETFs such as VAB and AGG? On the fixed asset side of the portfolio, there is an even split between money market funds and a GIC step ladder.

Also, what would be a good indicator(s) for identifying a long-term downturn in interest rates in Canada?

Thanks, and have a great New Year!

Q: I have been gifted this bond ETF in a margin account. I know little about bonds, and wondered if I should keep this ETF or if there is another bond ETF that you would recommend in this challenging economic climate? Thanks for all your guidance during these unprecedented times.