Investment Q&A

Q: Good morning,
How would the drop in US interest rates effect this Canadian ETF and would this ETF be a good add to my existing XBB VAB for long term stability in an RRSP. I am retired and mostly follow the Conservative ETF portfolio from ETF and Mutual Fund 5i

Thanks
Carl

Q: Ray Dalio and David Rosenberg to opinions i highly respect sure paint a gloomy picture of the next 10-20 years.
Rays suggested Portfolio weightings 7.5% Gold 7.5% other Commodities, 40% Long term bonds and 15% Intermediate bonds 30% stocks and 7.5% other.
My question is on Bonds, Specifically Govt treasuries , this would be the TLT correct?
and wouldn't Govt treasuries be seen as much safer than say the XLB which are municipal bonds, I have heard some fund managers on BNN say they wouldn't touch an Ontario provincial bond because of the provinces Debt. So that being said is there a version of the TLT that is available for me to buy?
Thanks Gord

Q: Can i have your opinion on this ETF please, also if you can tell me the yield. Do you think this will outperform a GIC over 3 years ?
Thanks Gord

Q: how do exchange traded bonds work? do they pay interest semi annually? do they have a maturity date? do they have a credit rating? do you like the ag growth issue or the Cargojet issue? thanks for your input Richard

Q: Peter,

Is the rate reset spread on preferreds only good until the reset date? If so, do companies tend to renew at a similar spread or can it vary greatly?

Thank you

Paul

Q: Hello,

A recent answer mentioned no-fee GIC's. I'm puzzled. We have several GIC's and with various companies. The yearly statements we now get from our advisor (statements that are supposed to be more transparent about fees) says every one pays a fee to our advisor. The GIC rates are net of these fees of course but, in my opinion, these are fees and all are pretty big percentages when compared against the net GIC pay-out. Your thoughts? Thanks.

Q: Good afternoon - Our collective family portfolio ( wife and I, retired) is roughly 40% fixed income comprised solely of GICs and Pref Shares. Our pref shares are with solid companies but given the lack of appetite for PShares the total value has been slowly deteriorating. This is something you have commented on in recent months and I’m wondering if and when we should bail and if we do, where then do we invest the proceed? Thanks

Q: As I mentioned earlier I have held 1800 units PSB in a corporate account since 2013 - 6 years. I failed to mention that I am paying management fees of 1%. I require a fixed income fund for this portfolio. Would appreciate any suggestions you have. Does this fund have a MER?

Q: Hello,
I purchased this fund in 2013. Holding it in a corporate account.
Annual income is in the range of $1000.
How is this taxed?
Don't need the cash, however is this a sell?

Q: I own these shares in my well diversified portfolio and would like to increase my position . What is your
opinion of this Fund?

Q: I am bit lost with bond market performance. XLB NAV has gone up by 10% YTD. TLT also up by 10%. As bond yields go up with interest rate peaking the price will come down. Will the total return still be significant if the NAV comes down by 10% or more in next several years. My experience with some of the other bond funds I held previously generated negative total returns after holding them for many years.

Thanks
Ninad

Q: Hi Team,

Under current market/economic conditions with interest rate background would you prefer short term or long term bonds and what is recommendation for CDN and US markets.

Thanks
Ninad

Q: Can I have your analysis of this etf as a way to add diversity to fixed income?

Q: I have some cash that I want to park for 6 months or so with the ability to withdraw
some when needed. Can you recommend something?
Thank You
Peter

Q: Retired income oriented long term (10 year focus) investor.
Already own CPD, CVD and XPF.

In the process of rebalancing asset allocations with the objective of increasing fixed income, and given the current interest rate environment can a case be made for buying one or all of these stocks? Why or why not?

Any other thoughts also appreciated.

Thanks.

Q: I have a philosophical question on bond allocations in a portfolio. Simply put, why would anyone put money in bonds or bond funds in the current interest rate environment. A high bond allocation made sense in the 70's and 80's but for the last many years the returns have been very small. I realize that the bonds won't fall in a recession, but is that worth the high lost opportunity cost compared to say, holding banks or utilities. What bothers me is the almost universal acceptance by advisors that a bond allocation is mandatory. As a nerdy engineer I get suspicious when ideas are presented as fact with minimal apparent logic. I can see why bonds are somewhat attractive to advisors as the low volatility keeps clients less "edgy" but is it really the best long term strategy under the current conditions. I am in the fortunate position that I do not need to make large withdrawals and I can usually plan ahead. Why would I need bonds?

Q: Hello, my question is about CVD, CBO, CPD and XHY. I know you like these ETFs for income, and most of them are in the Income Portfolio. When one looks at their 5-year chart, one can see a downward trend for all of them. What will it take to change that to an upward trend? Would you invest in these ETFs today? Regarding XHY, the Fact Sheet says “Exposure to a broad range of U.S. high yield, non-investment grade corporate bonds, based on market-value weighting”, does the low quality of these bonds bother you? Thanks, Gervais

Q: Hello,
I own both of these ETF's in my RRSP. The position in VAB is higher by 3 fold as compared to XLB.
I will be adding to one of these with my 2019 contribution. Given the outlook for rates (I lean towards the notion that they have most likely peaked), I was going to increase my position in XLB. Would you agree with this decision or would you favor VAB? As background, I am retiring in 13 years if that helps.
Secondly, do you view preferred shares and corporate bonds issued by public companies comparable in terms of asset categories? Both respond for the most part to movements in interest rates as best I can tell but would like to get your opinion please.

Thanks,

Dan

Q: Hello 5i Team
I own Government of Canada Real Return Bonds as follows:
All dollar figures are shown as per $100 face value
Dec 01, 2021
Cost basis - $178.9998
Market Value - $179.0590
Dec 01, 2026
Cost basis - $179.4574
Market Value - $200.2690
Dec 01, 2031
Cost basis - $185.6486
Market Value - $213.501
Dec 01, 2036
Cost basis - $145.3914
Market Value - $185.9052

My first question is the series 2021 market value has been declining the last couple of months. As the maturity date approaches does the market value go to $100.000 from the current $179.059 or is the decline in market price the result of the flattening yield curve (i.e. short term rates approaching current long term rate for the bond).

My second question, should I continue to hold these Real Return Bonds as part of my fixed income portfolio. They represent about 8 % of my fixed income portfolio. I have been quite happy with them since I purchased them.

Thanks for the excellent service.

Q: Gentlemen Good Morning,
My new Councillor at FNB propose me BNS S&P / TSX 60 Callable Contingent $8.05 coupons Notes Series 81F
Suppose to be no risk, with Annualized return 5.04%
There is no information on fees on the paper.
Your thought please ?
Thanks
Regards.