Investment Q&A

Q: Hello 5i Team

For the reader asking for US$ denominated money market funds at RBC Direct Investing - suggestions are:

RBF2014 a US$ investment savings account with Royal Bank of Canada ($100k CDIC insurance) - trades as a mutual fund but no commission. Interest rate is competitive (4.90 %)

Any of the TSX listed US cash etf listed - RBCD charges $9.95 per buy or sell - as long as buying/selling greater than $1,000 the percentage charged is cheaper than the mutual fund charge (1 % to max $50).

Thanks

Q: Can any reader suggest a US Money Market Fund I can use at RBC Invest Direct without having to pay the $50 commission they want to charge me.

At TD I use Cnd and US $ MMF without any charges.

Q: I hold some TLT, at a loss.
Do you think I should add to it or or buy IEF?
This is not for a long -term hold, I just hope, if rates go down, there may be some capital gain.

Q: I am holding a lot of cash in anticipation of buying a condo in the next 6 months. My main concern is capital preservation. What is safer: short term bonds or HISAs? Assuming a significant decrease in interest rates during the next 6-8 months, would short term bonds offer a greater total return than HISAs?
Thanks!

Q: I have these bond funds: PGF510, CVC, ZAG, XLB, along with mostly GIC's in my fixed income side of portfolio. Do these Bond funds pay interest the same as the GIC's or do they pay Dividends so I would get the Dividend Tax credit? All are in my margin account. Would any of these be worth adding to now that they have gone up somewhat? Thanks so much!

Q: For a long term investor with a focus on dividend paying companies or fund/ETF's are fixed income types appropriate for a T.F.S.A.? If so can you suggest 2-3 fixed income products?

Thank you- Jim

Q: What is my best option for a 1 year GIC or similar?

Q: Where would you recommend parking USD and CAD cash while waiting for opportunities to invest? Money market funds?

Q: For high yield bond etf's do you see any concerns with SPHY compared to HYG?

Thank you!

Q: A couple of questions about HSAV: first, I wish to compare what is available on GICs to HSAV - what is the effective rate of interest being earned on dollars invested in HSAV? Second, it seems the premium paid for the price to invest compared to the NAV has risen in the last month - is there a reason why? And is there any way to predict if the premium will get any smaller in the next few weeks? Last, is there a fairly direct relationship between any reductions from the BoC to what is earned with HSAV, eg if the BoC reduces by 1%, does the effective rate earned with HSAV go down by 1%? Many thanks for your excellent service.

Q: Do some of the Canadian Banks have ETF's similar to the Purpose High Interest Savings Fund (PSA). If so; can you provide me with a few recommendations. Thanks.

Q: Can you please recommend 3 bond ETFs that will provide in one year 10% yield including both dividends and capital appreciation?

Q: The fixed income portion of my portfolio is fairly low. Would now be a good time switch from equities into fixed income in bonds, or has the horse left the barn? What would be, in your opinion, some suggestions for fixed income?
Much appreciated.

Q: In your estimation, is the Apollo Tactical Income fund configured to strengthen as interest rates fall or remain at their current level?
Thanks!
David
Further to my previous question on AIF, can you comment on the tax treatment that will be applied to the distributions resulting from its upcoming merger? (note: my previous question on AIF's prospect should, I suppose. be better directed at MFIC...)

Q: I see that AD.UN currently has a yield of 8.7% and its stock price has been fairly stable for quite a while. Can you tell me how much the yield has varied over, say, the last four years or so? In other words, does the yield from this company vary a lot over time or is it too, like its stock price, fairly stable?

Q: Hello 5i,
I’m wondering if you have any experience in investing in companies like Armada Mortgage Corp? Can you offer and pros and cons comments?
Thank you
Dave

Q: My Son hopes to buy a condo in the next 6 months and has sold most of his stocks and now holds mainly cash. PSA, CASH, CBIL and UBIL.U all currently yield in the 5% range. I am thinking he is best to put most the funds in CBIL and UBIL.U, since these may benefit a bit if interest rates fall, whereas the yield in PSA and CASH would decrease. Or is he best to put funds in PSA or CASH and sacrifice a possible decrease in yield, for a safer investment in HISA ETFs. Thank you for your comments!!

Q: Hi there, there seems like there are many HISA-like ETFs available to pick from these days. Which would you recommend and do some have less risk than others? Thanks!

Q: Hi there, I recently asked “ Can you suggest any principal-protected US ETFs? For parking USD cash to earn a yield in a securities account. (The only product I can think of that has this profile is a HISA ETF.)”

Seems like there is no HISA equivalent in the US from your response. What is the next best thing that is US listed? A money market fund? If so which would you suggest?

Thanks!

Q: Calamos has started these structured etf's the first of which commenced May 1. They are based on the S&P or the Nasdaq or the Russell. A new monthly fund starts each month with the aim to protect all the invested capital if the etf is held for one year with a capped upside of approximately 10%. They are targeting retirees who cannot replace lost capital as an alternative to holding cash. Structured investing isn't new however the etf wrapper providing capital gains after a one year hold for US residents and a 100% protection rather than some lessor protection as well as a .7% MER all seem to provide substantial improvement compared with other prior structured offerings regarding fees and advertised protection as well as tax treatment on gains in a cash account. Calamos also seems to have a long history of options and hedging investment and claims a significant expertise. As a retiree I am seeking, respectfully and if possible, Peter's assessment of this series of etf's as a way to seek equity-like returns based on the S&P etf set up Calamos is offering as an alternative to a money market holding or even an HSAV.CA corporate class holding which provides capital gains but at around 5% instead of the greater potential on offer. Any comment on the reset of downside protection and upside cap each year would be appreciated. Finally if there is any possible liquidity issue that needs consideration please comment. I recognize this as a big ask however these etf's should have wide interest among retirees seeking a US equity play which aims to protect against any capital loss while providing double the current return of a risk-free holding which likely applies to a substantial portion of your subscription base. Thank you in advance Peter. Hope you're not taking the summer off!!!