Investment Q&A

Q: Hello 5i,

I purchased these four funds in an income account in the summer/fall of last year. To date ZRE and CPD have hung in there, while the other two are slightly down overall including divs. Are these funds behaving the way you would expect for an income investor?

Q: It seems certain there will be several interest rate increases this year (and possibly more in 2023). That means fixed income will become more attractive. Please provide your outlook on this change and discuss how various fixed-income types (bonds, mortgages, mortgage-backed securities, consumer financing, etc.) will be affected and what opportunities for individual investors are likely to appear in the fixed-income sector as rates rise over the next 12-18 months.

Thank you,
IslandJohn

Q: I'm entering retirement and won't be adding much more new capital to savings and so capital preservation is paramount as I look at drawing down phase in the next 6 months. Right now I am still heavily exposed to the markets with about 85% equity exposure. I want to increase the amount of safety but am concerned with the loss of purchasing power and feel the old 60/40 rule isn't adequate anymore. The big dilemma in today's environment is that there really aren't a lot of alternatives to stocks for keeping up with inflation, but this involves capital risk. What balance do you think is more appropriate in this environment? I'm thinking around 75/25 while trying to keep around 12-18 months of expenses in high interest savings so one doesn't have to sell into a down market.

Are you aware of products offered in the market that may provide returns of 5-8% while being "fairly" safe for the capital invested?

Any suggestions on perhaps bond funds that offer returns that will at least keep pace with inflation after fees without undue manageable risk for capital safety?

Looking for any ideas..preferred shares ETF's? (know there is still some capital risk here). Thank you for your help and input.

Q: Hello 5i Team,
I have a mixed basket of ETFs across assets types (equity, bond, preferred, etc...) in my TFSA for income.

I was looking at the dividend growth over the past 5 years and noticed that many of the ETFs have had a negative growth. Namely, bond indexes (VAB,XHY, HYI, and ZEF) have trended downward as well as prefs, REITs and europe/emerging equities (CPD, XRE, and ZWE).

I was wondering why that is? Is it because of low interest rates over the years or rising debt levels(or something worse)?

Thank You,
Andrew

Q: I currently own CLF,CPD,ZAG and HLY in a LIRA account. The weight of these 4 ETFs are all 2 %. each. I would like to sell 2 and then use the cash to increase the weight of the other 2 that I will keep. Which 2 ETFs would you sell?

Thanks

Q: Can you provide a recommendation for the the equivalent to PFFA in Canada. i am heading into retirement so looking for dividends.

Thank you and merry Christmas

Q: Thanks for your comprehensive answer to my question on fixed income. Just a further clarification. I have often wondered about the usefulness of preferred shares. It seems to me that they are just as vulnerable as stocks, so why have them rather than stocks? I know that you get paid first if the company goes under. But I am not sure that is a big consideration in most cases.

Secondly, i wonder if you might suggest some symbols that correspond to such an arrangement for fixed income.
Thanks for the excellent service

Q: Hi All at 5i!!! Is there a significant difference between CPD and ZPR??? Would one be better than the other for income and security??
Cheers, Tamara

Q: This preferred is being redeemed. Is CPD a suitable replacement?

Q: Hello,

I am concerned in a rising interest rate environment CBO (5.0%), CPD (1.92%), XHY (7.4%), VAB (4.13%) are positions that need to change in my portfolio. Portfolio Analytics recommends holding 35% in fixed income. I currently hold about 18%.

Should I be selling some or all of these positions and then re-investing in other fixed income vehicles given the rising interest rates?

I would appreciate your feedback/suggestions on current position. Thanks again for all your great service.

Q: How would IShares Preferred share ETF (CPD) and IShares Convertible Bond ETF (CVD) perform in a rising rate environment?

Thanks, Mike

Q: I need to raise some cash which one can be trimmed today? Thanks.

Q: Hello Peter,

The ETF's above are in the income portfolio. All have different yields that are paid out monthly. My question is, do any of these "dividends" increase over time? Not the yield but the actual payout per share?

Thanks,

Kelly

Q: I'm thinking of switching my CPD to ZPR because the return of ZPR has been significantly higher and the dividend is slightly higher. Curious what your thoughts are. Do you prefer one over the other? Any reason to own both - half in one, half in the other?

Q: Hi Team,
Could you suggest Canadian ETFs of the following sectors for Senior incomes :
1 /Reit 2/ Utility 3/Prefer 4/Bank/Financial 5/Energy.
Please deduct as many question credit as needed.
Thanks as always,
Tak

Q: Hi! I have an ETF portfolio and a portfolio of Canadian and U.S. stocks. I have 10% of my ETF portfolio in Fixed Income given the historically low interest rates. This accounts for about 5% of my overall portfolio which is pretty low. Difficult to add here. I have some XHY and CBO which offset the risks of rising rates somewhat. Should I add to my fixed income portfolio or wait for rates to rise a bit. If I do add, rate reset preferred might be another option or continue adding to CBO and XHY?

Thank you,
Jason

Q: Hi 5i,
What is your opinion of perpetual preferred shares at this time (some utilities and financial companies)? I invested in them last year and have made a modest profit. The profit is nice but the dividend based on my cost base is nice also. I know the growth is limited but do they remain good investments for the next few years considering the economic climate?
Thank you.

Q: I read your article about the correlation between stocks and bonds and it made me wonder whether this was a good or not so good time to purchase them? I read a little more in another article and it said that in the same historical instances, bonds have tended to do well after. Would you agree with this?
I only have room in my margin account so would CVD, CPD, and HAB be giving me interest as apposed to Dividends so there are tax implications?
Thanks!

Q: Would like to create a 10-15 stock portfolio out the securities listed above, to meet my retirement income and growth needs, for a long term hold.
CPD is my current, imperfect proxy for the fixed income portion of my portfolio.
CVE, CNQ, SU would be the only opportunistic (and highly correlated) purchases, to take advantage of the current low valuations for the petroleum industry. These would be sold if the oil & gas market's prospects change.
Please rank all the securities on the basis of return potential over 2-3 years as the primary criteria,
Please eliminate any stock which does not have adequate balance sheet strength, from the lineup.
Please add to the lineup all securites that would facilitate the creation of a defensible, well-diversified, long term portfolio - especially if it is in a sector that I have overlooked.

Thank you for your expertise, and willingness to help me sleep a bit more soundly.

Q: Hi I have this etf in my account . Should i sell some and buy stocks or add some i am looking for dividend income.

Thank you