Investment Q&A

Q: What is your current opinion of the MFS Charter Income Trust as a defensive and income instrument?

Q: I wish to find a place for some cash. I am not entirely clear on some details for HSAV: the current trading price is around $106,60.

Of course, there are no distributions; What do you calculate the effective yield to currently be?

My trading platform suggests NAV is $106.30, so there is a premium being paid at the current price. What effect will that have on the yield? And what effect when I come to liquidate the holdings?

Last, if you see HSAV a not that good a place to deposit, what other place(s) would be good to hold some cash? BMO HISA is currently offering 4.6%

Many thanks

Q: Supposing that an investor had three registered accounts of roughly equal size that they wanted to change from equity ETF's to a fixed income allocation for their portfolio, and these accounts would have to be converted to RIF's in 6 years. Let's also assume that we get one or two more small rate hikes this year, then interest rates flatten and begin to come down slowly over the following several years. Which of three options would you choose on a risk/reward basis? 1. Just hold money market funds currently paying 4.5%+ 2. Barbell XSB and XLB using two accounts, and put XBB (or ZAG) in the third (avg. yield close to 3 %? with potential cap. gains) 3. Put TLT in all three, yield close to 3%? maybe highest potential cap. gain? With the BOC policy rate going up close to 5 points since the start of 2022 the bond funds above fell anywhere from 10%+ to 30%+. Does that imply that if the BOC rate went back down 2.5% that they would rise 5%+ to 15%+, or you can't make that kind of straight line assumption? Maybe there is a way better option, but I don't really want to tie up funds in GIC's and don't want to try to pick individual bonds either. I also considered something like PSA but no cap gain upside there and the money markets probably pay as much interest or more. Thanks for your thoughts.

Q: you opinion on rbf5280

i am a little light in the hi yield space

Q: I have seen an offer to a friend from Schroders for a Canada Bond paying 8.18%.

The document states that there is a 1 year buy back

The buy price is $108 and the buy back price is $108 after the 1 year term

The purchase is for 925 units

Interest is paid quarterly, $2042.95

Brokerage fee is $249.75

How are they generating this return from "Canada Bonds" to clients when Canada Bonds are at best 5%?
Also how can they set a buy back price? It looks like a GIC to me but there are no GIC's that pay 8.18%.

Joe

There is a fee for admi

Q: Hi, I have heard about short term bonds providing high yields. I don't have much experience in this area. Could you recommend a way to add this into my portfolio?

Thanks
Paul

Q: Hello Team,

What are your favourite etfs for high interest savings account for both CAD and USD?

Thank you!

Q: For readers information,I have these MMFunds in various accounts with TD.(Canada and US)There are no fees and they pay 4%+.The rate varies with todays interest rates.Same day stock or bond purchases are allowed by selling these funds.I hope this helps.

Q: Hi,

Can you offer your words of wisdom about this product. I don't see any questions this when I searched your archives. Came across this product some time ago when a guest on BNN mentioned this.

Is this a safe place to park my USD (iTrade allows me to hold USD) Are thee any other products that are similar and less expensive? It's MER is 0.12 according to Horizon's website.
Is this okay to hold them in both registered and non registered accounts? With the long anticipated pullback on its way, I thought parking cash in USD is a way to go. Plus USD seems to weakening and may be worthwhile to buys some now?

As always many thanks in advance.

Q: In a registered account as a single long term etf for bonds is hyi an acceptable choice over zag? If interest rates go furhther up or down, is there more risk with hyi? These are currently showing monthly distributions of HYI: 6.72% and ZAG: 3.56%.
Retired investor...

Q: Could you comment on this with rates rising

Q: When you own a money market fund such as tdb8150, do you accrue interest on a daily basis. If I buy Monday and sell Friday , will I receive interest. One does not need to hold for a specific time ?

Q: I purchased ZFL as a hedge against the possbility of a recession. I am now down 8% on this position, interest rates keep going up and there is no recession. Assuming a balanced diversified portfolio, what would you do with ZFL; HOLD, SELL or Add ??
Many Thanks
John

Q: If the scenario plays out of higher interest rates for longer; is it logical to presume Reits, and Preferreds, -both sensitive to interest rates, may continue to soften. I have been buying them as they are going down but wondering if this is a good strategy. Could you comment. Thank you.

Q: So here is an interesting one for you. Recent (early) retiree at age 55. Let's assume I have 2 bond funds - one domiciled offshore and set up as a Trust, and the other a traditional mutual fund domiciled in Canada. Assume both have a similar return and distribution profile, as well as holdings. The offshore one only pays nominal monthly distributions, meaning they essentially go towards increasing one's adjusted cost base ("ACB"). It is not an actual cash distribution. This is good in the sense that, in theory, this reduces your capital gains when one sells. The other one pays the same monthly distribution, but it is cash, and not just nominal. As a retiree looking for cash yield, am I being short-sighted in wanting to stick with the fund that pays the monthly cash distribution, or is there something besides what is noted here that I should be more focused on with the fund that pays the nominal distribution? At this stage, all other things being equal, I am inclined to sell the offshore one and just own the one fund that is domiciled in Canada and take the monthly cash income.

And sorry about the long question. I really did try to keep this short :)

Q: I noticed in your disclosure you have an interest in TLT, I hold ZTL which I assume is comparable?

Horizons Seasonal Rotation ETF as of May 31, 2023 has 75% in 0-3 month T-bills & 6% in 7-10 years with no exposure beyond that.

Could you help me understand the risk/reward difference between the ultra-short term and ultra-long term T-bills and which I would be better with in todays market and assumption interest rates may have peaked, or should I cover both ends?

Q: I was considering investing 300k into 2 or 3 of these picks below for almost guaranteed savings. This would be in a non registered holding company.

1. Horizons Cash Maximizer- HSAV (which you have pointed out is more tax efficient since they don't pay distributions and yield gains are building into escalating price, etc)

2. Horizons High Interest Savings-CASH which is straight up high taxation interest gains

3. Purpose High Interest Savings- PSA which is straight up high taxation interest gains.

Please advise if you have a preference for perhaps two picks at 150K, or all three at 100k for example.

Alternatively, if there is another TSX traded option that you suggest, i would look at that too. To be purchased via CIBC Investors Edge.

Thank you.

Q: I own TDB8150...I use it to park cash within my TD Webbroker accounts...currently pays 4.05%...that rate didnt move higher with latest interest rate hike...believe it didnt move higher on last rate hike either...I go onto TD's website to see mgmt fee but am unable to find details on it...are you able to tell me what the current mgmt fee TD is charging for this investment...please and thank you...and also any suggestions as an alternative place to park cash...take as many credits as you need...and thanks for your insight...Cheers

Q: Today the US Fed announced a pause in its rate hikes however stating the next move will be up. Looking back in history I see that 90% of the time a pause in the fed rate is followed by a reduction in rates and not an increase. If history repeats itself I'm thinking bonds should start to increase in price. To take advantage, if my thinking is correct, should I hold short, medium or long bonds. I have held BLV for some time now and am in a loss position but am thinking of adding a wee bit more.

Appreciate any comments you have.

Q: Based on the current yield curve, what kinds of maturities should I have for my bond allocation? As the yield curve is currently inverted, and if we expect the yield curve to become normal again, then should I have more short-term bonds to benefit from price increases with short-term yields coming down?