Investment Q&A

Q: Hello
I'm looking to include this company in my rrsp account. I would like to hear your analytical opinion on holding this long term. I am however curious to know how can they pay such a juicy dividend when most of their holdings pay less in distribution and has been lagging in the markets lately. Finaly, is this something you could see yourself including in an income portfolio.

Q: The vast majority of my holdings are non-dividend paying growth stocks. The one exception is HMAX, which I purchased earlier this year for its 15% dividend. It is now 3.5% of my portfolio and I am contemplating increasing this to a full position. My reasoning is that most of the bad news in the banking/insurance sector has already been factored into the share price and that, overtime, HMAX's value will rise again. Meanwhile, I'll receive a healthy dividend. I bought HMAX at $13.67; today it's trading at $13. 24. Do you believe the dividend is safe (I'm aware it was reduced last year from 17%) and do you see the current price as a buying opportunity assuming one has patience, likes the dividend, holds no other banks or insurance companies and expects only moderate growth going forward? Thank you.

Q: I'd like to assess the following group of ETF's I am considering purchasing from a conservative and safety point of view ...... HYPT has been used as the fixed income part of the portfolio . Please advise if this is appropriate and if not a suitable replacement ? The 5i income portfolio has Canadian preferred, convertible bond, and high yield US bonds for around a 15% weighting as the fixed income section ...... Please give a rating of between one and ten with one being the most " conservative and safe " for the following group of ETF's . I will assign the 5i income portfolio a four just so I can see how my choices rank against it using the criteria I suggested ...... Also everything I have chosen is a Hamilton product. Does 5i consider that problematic ? Thanks for your terrific service .....

FMAX 10%
HMAX 10%
QMAX 20%
HYPT 15%
SMAX 20%
LMAX 10%
HYLD 10%
HDIV 5%

Q: portfolio strategy question

I have adopted a dividend investment strategy of investing predominantly in canadian dividend paying equities and as expected am overweight in financials, telecom and utilities, this strategy allows me to sleep well at night, I am looking at enough dividend income from the portfolio to retire on and not have to touch the principle investment.

besides the lack of diversification in geography and sector. can you give me your opinion about concerns you may have with such a strategy and what you would suggest doing otherwise ?

Q: Interested in your thoughts on this one .... Global X Russell 2000 Covered Call ETF (RYLD). What is the ROC level and any thoughts on the reason for the steady decline over the last 3 years. Also, would you consider it relatively "safe" for a retired investor ... maybe @ 5-7% of total portfolio value.

Q: Hello,

My mother, who is 72 years old, recently received an inheritance. She is looking to invest this money in her TFSA and would like to use it to generate monthly income while also aiming for some growth. Could you please suggest a few ETFs that would be suitable for achieving these goals?

Thank you,

Derek

Q: For a RRIF looking forward assuming a slow decline in interest rates, which of these two (HMAX, HDIV) would you select and why please? Do you have any issues with either or both these? Thanks again. Dan

Q: Hi Group i am 74 with a 500k portfolio. I do not need to use this money for another 5 yrs. I would like to slowly convert to dividend / growth / value ETFs. I am looking for yield of 5% or higher along with a 10% growth/value profile. Can yo give me your top 2 picks in the 6 main sectors that fir this criteria along with a few words explaining your selections. Thanks with your help with this

Q: In your answer to me on the BMO and Hamilton covered call ETF's regarding " return of capital " you refer to ZWB having a return of capital of 75% and HMAX as 84% .... Your answer basically addressed taxation which in my case is inside a RRIF account...... And in a follow up question from Bruce you give a brief explanation. I don't think I understand what the term means as to me it sounds like I am getting my own money back which strikes me as a bad thing. Could 5i explain just what exactly the term means ? And whether or not it is a good thing, bad thing , or nothing to be concerned about ..... Thank you as always for your sound advice .....

Q: Regarding both BMO { ZWB, ZWU,ZWT, etc. } and Hamilton { HMAX, UMAX, FMAX, etc. } covered call ETFs, do either use a return "of" capital as part of their distributed yield ? ..... If so how much and would it be a deterrent from buying them ? I have put the word "of" in quotation marks as I think it means I am getting my own money back ? ..... Thanks for your always sound advice .....

Q: On march 28 question ,I was interested by the topics and by your answer,that seems to consider the 3 ETF in the same category :"HMAX would fit in this category as it does employ a covered call strategy targetting Canadian financials and primarily the 'Big 5' banks. Some covered call ETFs we like are QYLD and XYLD. We also think Hamilton ETFs line of covered call ETFs is solid, although some are very new and small which we would watch out for. ". Personnaly I did not choose QYLD and XYLD since I don't consider them in the same category as HMAX and others ETF as BMO ETF etc.. QYLD exerts options on 100% of its portfolio,wich limits upside and could lead to a significant long term downtrend; this is not the case for HMAX whose options are on 50% of its portfolio and consequently it keeps some upside potential.Is my comprehension OK or Do I miss something?

Q: Which covered calls ETFs would you recommend for short/long term. Would the HMAX fir this category?

Thanks for your service!

Q: Hamilton has the tax breakdown of their ETF's for 2023 posted on their website. I see both HMAX and UMAX distributions are 84% Return of Capital. This seems high. Do you think this is an aberration or potentially the norm? If an aberration, could you please quesstimate a percent range that you'd expect Return of Capital to usually be.

Q: Just finished reading the Money Saver's email warning " Avoiding The Yield Trap " on covered call ETF's . Where it mentions ETF's yielding in excess of 10% yet uses a BMO banking covered call as an example . I believe all the Hamilton ETF covered call products yield in that 10% or better area and in the case of the banking ETF ZWB used as an example, HMAX yields 15% which beats ZEB's 10 year return by over 5% . And that doesn't take into account the 50% of the HMAX portfolio that contains the underlying stock which should return 50% of the return on ZEB .....If ZEB over 10 years returns 9.6% then HMAX should return the annual yield of 15% plus 4.8% reflecting the 50% of the portfolio containing the underlying stock .... There will also be a small capital gain/loss reflecting the covered call side of their holdings which I have no idea how to calculate so have ignored .... Please explain how I would be missing out growth in the banking sector using the example the Money Saver used were I to purchase HMAX instead of ZWB ? 15% + 4.8% = 19.8% which doubles ZEB's return ...... Please explain the flaws in my logic. { I suspect they are there I just don't know what they are }

Also could 5i give me a list of all the Hamilton ETF products that operate like HMAX { 50% of the portfolio with the underlying securities } with an explanation of what sector they represent, their current yield in percent , and annual dividend amount { I'd like this number so I can calculate the yield on any given day while I follow them and make my decisions on whether and when to purchase }

Thanks for your great service in helping us DIY investors ......

Q: How would you compare Hmax and BKCL ?

Q: !What can you tell me about these Besides paying a monthly dividend, they seem to be stagnant in appreciation. Is it worth keeping or exchange for something better.

Thank you

Steve

Q: If you had to choose between NWH.UN and HMAX, which would you choose and why?

Thanks for your service!

Q: Good evening,

I have a couple of questions regarding the following 5 ETF's. If it cost more than one credit that is ok. Just curious if you only own those 5 ETF's how diversified would you be? I understand that you be giving up some upside but from a diversification perspective do you have all your sectors covered?

For full disclosure I have 15 percent of my entire portfolio allocated to this 5 ETfs too add a little boost in income.

My last question regarding these 5 ETF's iss they all pay a distribution except SMAX and QMAX. SMAX and QMAX pay dividends according to my platform BMO investorline. Does that mean both these two are eligible for the dividend tax credit?

Thanks and have a great day.
Jimmy

Q: So a lot of people think that interest rates have peaked and are set to go down, thus the market reacts positively. I believe that interest rates have peaked BUT will remain higher for longer. I anticipate that the market will initially react negatively to this but eventually will settle down to the new reality and continue to react to such metrics as earnings growth etc..
Recognizing that no one really knows the future, what would be the likely scenario ( short and long term ) for each of the sector ETF’s I am invested in : Canadian banks , American tech, American healthcare, Canadian large cap industrials/ utilities. Thanks. Derek.

Q: Do these products match the yields they advertise ? What would the expected result to the etf price and yield in the environment of rate cuts in the new year.
Thx