Investment Q&A

Q: I recently heard on a podcast that small caps as a group tend to recover quicker than large caps. Can you recommend some Canadian and US small cap ETFs? Thank you.

Q: Hi 5i,
I am not 100% clear on stock and ETF's allocations for investment plans. Take as many points as needed to answer the questions below. I apologize in advance for the length of the question.

As a Canadian investing through a Canadian site (RBC in this case), split into CDN and US sections (moved CDN funds to USD and paid the exchange), which stocks and ETF's should be allocated to RRSP (CDN or US sections), TFSA, & Non-Registered accounts?

As an example, an RBC RRSP account is split into CAD and USD segments. If I purchase VWO in USD on the US segment instead of VEE on the CDN segment do I retain the 15% withholding tax? If I purchase VWO in CDN funds on the CDN side of the RRSP, what happens to the 15% withholding tax?

Is there a tax difference when filing a CRA 1135 form. e.g if VWO or VEE are 100+k CDN value: VWO on the USD segment or VEE on the CDN segment or VWO on the CDN segment.

If a US stock has a dividend, should this ever be purchased on the CDN side of the RRSP or in a TFSA? .. e.g. CRM with a small dividend or AMGN with a larger dividend

Can you please assign the best allocations (RRSP, TFSA, Non-Registered) to examples a the bottom of the question.
e.g. Non-dividend Growth US stocks (Googl, AMZN): TFSA, RRSP
This tells me that AMZN is best in the TFSA for growth, and in an RRSP purchased in CDN or US funds is the same effect other than currency at the time of purchase.
If a stock or ETF should be in CDN or US sections can you note that as well? e.g. RRSP(CDN or US).
It is a lot to ask so limited examples below will hopefully reduce the effort.

5i recommendations
Non-dividend Growth US stocks (e.g. Googl, AMZN):
US small Dividend Growth (e.g. IWO):
US Foreign ETF (e.g. VWO):
CDN ETF with US stocks and other int'l stocks (e.g. VEE):
CDN High Dividend (e.g. CDN Utilities/Reits/ETF's):
US High Dividend (e.g. US Utilities/Reits/Medical/ETF's)
All World ETF (VT):
All World ETF (XAW):

I very much appreciate your service and time to answer questions.

Jerry

Q: Hi 5i team,
Looking at the broad US market index (apart from NASDAQ), which will be your top two index ETFs that will most likely provide the strongest gain and the quickest bounce when the market turns around? And why? Prefer Canadian listed ETFs if available.
Thanks.

Q: Please recommend 3 or 4 ETF's that one might start to gradually invest in during this downturn.

Thank you,
Patrick

Q: Hi, I have a bunch of cash looking to deploy in this carnage. I'm a bit underweight in international and emerging markets, however I'm a bit worried about putting new money into these markets compared to the US market when markets do bounce back. How would you recommend I deploy new $ into international, emerging markets, and US/CAD markets over the next few months?

Q: I currently hold VGRO in my registered account and looking to diversify with another low cost Growth ETF Portfolio. Suggestions please

Q: I am looking to place 10 % of my RRSP & Cdn non-registered portfolio's into small to mid cap Canadian companies via an ETF

What would you recommend?

Q: Once the current rout in the market bottoms, please suggest the best ETF's listed on the TSX to ride the market back up, purely for capital gains, covering both the TSX and the Dow. These would be short-term investments during the recovery mode.

Q: Greetings,

I just sold some mutual funds(finally) in my wife's RRSP account. We are fairly diversified at individual level, majority of our holdings are from your Balanced and some from growth and income portfolios. All our funds are in Canadian and would like to diversify.

Please advise, if this is right time to diversify in to US/World markets. if it is a right time, can you suggest few EFT's for 5+ year hold.

Q: Could I please have 5 recommendations for investment in Canadian stocks and/or Canadian ETF's focused on the US market. I currently have no investments in the US market in my RRIF. Thanks

Q: RE: -- Stephen's 2020-01-22 question on VGG & IWO --

Comparing VGG vs IWO over last ~ 7 years (details below), VGG has less risk/volatility (beta), a higher dividend, and a better return (based on risk for the ETF category). As I slowly adjust my portfolio this year to reduce downside risk when a market correction eventually hits, what do you think of moving some or all IWO to VGG. Most interested in your thoughts here.

As always, thanking for you wise advise.

---------------------------------------------------------------------------
Ticker IWO VGG
MER 0.24% 0.30%
Dividend 0.70% 1.20%
Beta (Risk) 1.12 0.74
Style Small Cap Growth Large Cap Blend
P/E 25 26
Mkt Cap $9.8B $625M
Risk vs Category Average Risk Average Risk
Return vs Category Average Return Above Average
Morningstar Rating *** ****
---------------------------------------------------------------------------

Q: Have vgg as a us position. Should i add to it or consider another us etf? As always thanks for your amazing service.
T Steve

Q: Happy New year Peter & Ryan!

Very happy with the Growth portfolio performance last year. Quick question on the US ETF exposure. What is the argument for taking the growth 'style' IWO over IWM or the value based IWN?

I know the performance has been better for Growth in the last 10 years, but most of the perhaps 'dated' literature I've read suggests value biased ETF's tend to do better over the long haul and would be curious to get your opinion.
eg) https://tandfonline.com/doi/abs/10.2469/faj.v55.n5.2300)

Thanks!

Q: Hello 5i,
I am now putting growth stocks in my TFSA after putting in my GIC's over the years. I am holding IWO and LNF in an unregistered account. To complete my TFSA contribution should I include IWO or LNF?
Thank you
Stanley

Q: Hi Gang, I am interested in buying one of this etf. Iwo, iwf,iwd, or Dia which one would you buy today. Our any other suggestion. Reasons? 3-5 years. Thanks
Alnoor

Q: My adult son (Canadian citizen/resident) is in his early 30's, has maxed out his RSP and TFSA (he holds high-quality individual securities within these accounts, which have done well over the years), and he is lucky to have a high-paying job in which he has surplus funds (Canadian dollars) that he can invest, within a non-registered account, approx. $20k to $25k per month. The goal is long-term growth, aggressive (80% equities), with the possibility that he may need some of the funds within the next 3-5 years, to join a group practice (capital contribution toward partnership). My advice to him is that he purchase each month among the five following ETFs (% as indicated below), rebalancing as he makes new monthly contributions:
20% VAB = Vanguard Canadian Aggregate Bond Index ETF;
20% ZCN = BMO S&P/TSX Capped Composite Index ETF;
25% VFV = Vanguard S&P 500;
25% TPE = TD International Equity Index ETF;
10% ZEM = BMO MSCI Emerging Markets Index ETF.
What do you think of these 5 particular funds and the overall allocation? For his situation, are there different ETFs you might suggest we look at that would be better-suited for his situation? Thank you.

Q: I noticed in the latest BlackRock circular that IWY (iShares Russell Top 200 Growth) has significantly outperformed IWO (iShares Russell 2000 Growth) based on the latest 1 year, 5 year, and 10 year published returns. I assume you like IWO since it is in your growth portfolio. Can you elaborate a little on if/why you might prefer IWO to IWY and would you endorse a switch to IWY at this time for someone already holding IWO?

Q: Which of the three main US small cap etfs do you prefer, IWO, IJR or VB, thanks Bill

Q: Hello Peter and colleagues
I am trying to develop a simple but effective portfolio. What would be your opinion and recommended percentages on a simple portfolio including these ETFs: XIC, VFV, VXUS
Would you recommend adding more ETFs while keeping it simple? and if so, what would be the percentage of each. Do you recommend replacing VFV with VTI? and why?
Please deduct as many points as needed.
Thanks

Q: Hello Peter,
I was thinking of investing in a us small cap etf. I was leaning towards Schwab US small cap etf ,SCHA. Any comments or can you suggest one? Also, if you have a us small cap trading on tsx, would appreciate it. Thank you.