Investment Q&A

Q: How can one play the US10Y which had risen 24% in one month?

Q: I currently hold both ZHY and XLB for exposure to bonds. I am looking to consolidate into one. Can you suggest which is better for a long term bond position?

Q: Hi 5i team.
Re ZTL, this long term US Treasury Bonds ETF has been declining since May. With the blue sweep in the US, additional benefit spending to come, possible rate increase and inflation in a year or two, would you recommend to sell this ETF now? What needs to happen to see this ETF reverse the fall? Given the current world economic situation, what other bond etfs would be safer bet? (amount of interest income is not important) Thanks.

Q: Hi there,
I see I have quite a backlog of question credits so, I thought I should put some of that to work. I have a general question about rate reset bonds. I have been thinking about reset bonds in etf form if there is such a thing. This would be for using new money to start a small quarter of a position over the coming year. I am closing in on retirement within the next few years and would be interested in hearing your thoughts when compared to preferred shares or laddered bonds. Maybe resets are similar to taking a laddered bond etf - but I am not sure of the merits given the paltry income for bonds. My concern is this market cannot keep up this parabolic growth much longer and the market appears to be pretty frothy right now. As a survivor of the tech wreck, I am worried about what I see as a significant correction (up to 20%) within the next 24 months or so. I am not afraid of risk but I do want to explore a variety of hedging options out there without exiting some of my growth stock positions. Cake and eat it too I expect. I still have about 6 or 7 years in the market. Thanks as always for your thoughts.

Q: Hi Team,

Like many I am trying to figure out what to do with cash on hand with interest rates near zero. I am trying to generate income while managing risk/volatility for this "low risk" part of my portfolio.

After some research I have come up with what may be three "best of breed" places to put some cash to work: REITs (e.g., RIT), preferred shares (e.g., HPR) and real return bonds (e.g., XRB).

What are your overall thoughts please on these securities at this time? Do you see any better alternatives in this market and interest rate cycle? What are the main downside risks you see for each security? Would you consider blue chip, high yield common shares more attractive or is there a diversification benefit here?

(Please deduct as many credits as appropriate for this compound question.)

Thank you so much, Michael

Q: Hi,

Probably a newbie question, however if I don't ask I will never know :)
Can VLB be considered like an hedge against VSB?
My fixed income portion needs to be higher and I currently own vsb.
Or would it be wiser to simply buy something like VAB instead of the other two?

Thanks

Q: In response to Paul's question
Q: I am with TD and they do not list this ETF (PSA) wish they did - is there a TD product that is available that compares.

I think TDB8150 (CND) and TDB8152 (US) would be the equivalent - they are listed under mutual funds (not ETF) on the Waterhouse platform

Cheers
Scott

Q: TPAY is a TD income ETF. Do you have an opinion re: a place to store cash for 6 months? Thanks!

Q: Hi,
On Jan. 5, Paul asked about an alternative to PSA at TD. Your suggestion was HISA but as you say, you don't know all the products at each brokerage. HISA is not available for online trades. All I've found at TD in this category is TDB8150 TD Investment Savings Account (no load) under mutual funds, which pays only 0.25% right now.
Michael

Q: I am with TD and they do not list this ETF (PSA) wish they did - is there a TD product that is available that compares.

Q: Please comment on the timing of taking a position in RBF1650 as an income investment. What is the risk compared to XBB? Inflation is one of the biggest worries for Canadians currently. Happy New Year to everyone at 5i. Thank you

Q: Hi 5i research team - Can I have your opinion on the ZCM, ZCS, HFR ETFs?
I am looking for ETFs in the bonds category that do not fall much if the market tumbles (relatively safe) and at the same time pays a good interest compared to money market funds. I dont have any in the US market.
Any other ETFs you can think of in the CAD and US markets?
Thanks for your input!

Q: Fixed Income portion of portfolio is 40% and some deposits came due so need to deploy that cash into fixed income. Thinking of putting 25% of the 40% FI into these two ETFs. I would appreciate your thoughts on this plan please. Alternatives are welcome. Thanks again.

Q: Just wondering about the suitability of Fidelity’s Global Bond ETF (FCGB-T) for foreign fixed income exposure? There had been a question before about VGAB which I think is smaller, newer, and less indicated yield. Any thoughts would be appreciated. Thanks,

Q: Rightly or wrongly, I believe a market downturn is coming with negative rates a possibility. I have raised cash by selling many of my equities. I'm not confident in the health of the corporate bond market but was wondering if you can suggest a government bond fund/ETF (US and/or Canadian government) or other government fixed income strategy that may benefit from negative rates?

Q: Dear 5i Team,
After the recent great run up in equities you had graded highly(thank you), I’d like to move some profits to fixed income to keep close to the 40% FI.

What type of fixed income you think is most undervalued lately? Any ETFs on Canadian or US markets, any geography, graded from lower to higher risk.

Regards,

Carl van Rossum

Q: I am looking to reduce risk in my portfolio via sale of tech stocks and purchase of bonds. Can you recommend a high yield bond fund?

Q: Hi, the GICs of smaller banks through TD direct investing such as Equitable, Home Equity and PC Bank offer much better rates than the big 5 and insurco banks. I know they are CDIC insured up to $100k but would still like to invest knowing they are decent and relatively secure companies. Could you comment on or rank the 3 mentioned in this regard and any you would pass on, Thanks

Q: I am a client at Disnat.
I would like to have a suggestion on how best to use my cash until I decide what type of investment I want to make. Is there a mutual fund or ETF that I could use? Thank you

Q: Hi, I'm 100% equities and when holding cash waiting for opportunities I've been parking it in PSA. With the yield so low now, do you have a few other suggestions for almost cash like bond ETF's that have low risk/volatility and low MER and have a higher yield (~2-3%)? Usually hold less than 5% cash in my portfolio and holding period <6months. I was looking at the Vanguard or iShares ETFs for options. Thanks!