Investment Q&A

Q: Hi Peter and Team,

The March 21st issue of the Globe & Mail had an interesting article called 'Give peace - and bonds - a chance'.

My feeling is that the war cannot go on much longer, and Trump will be compelled to 'claim victory' even though Iran still seems to have the upper hand in their blockade of the Strait. Perhaps it's true what the US underground bombing of an Iranian facility in the Strait very recently stated "We not only took out the facility, but also destroyed intelligence support sites and missile radar relays that were used to monitor ship movements," Admiral Brad Cooper, commander of US Central Command (Centcom) says in video message posted on X."

It occurs to me that it's extraordinarily difficult to follow one's portfolio with any degree of certainty now that economics and politics are so completely linked.

What's your take on David Berman's thesis, and the ZAG ETF he refers to.

Thanks as always for your insight, especially in these difficult times.

Q: I hold 2 bond funds in my RSP, ZAG and BND. Both bought last summer after a GIC matured and I didn't want to lock in funds again at that time. Both ETFs are slightly under water on the stock price, and getting worse. Interest payments don't do much more than make me even. With a low yield (esp. ZAG), market movements can be a killer and has me thinking a money market type fund might have been better, despite lower yields still. I know you seem to think rates will be coming down - which I assume will be a plus - but the market seems to be pointing the other way. Questions:
1) would you continue to hold these funds
2) do these complement each other, which was my thinking
3) do you see either of these funds changing their monthly payments
4) are there better alternatives
Thank-you

Q: Hello, I have a small position in ZST . I like to add more bonds for safety and income .
I have been looking at : XSB and XBB and ZAG as they hold Government bonds . Can I assume that by holding one of these to diversify or a combination will do the trick !! ?
Thank you
Carlo

Q: What is your opinion of this Bond Fund CIG4102 - is it worthwhile to own? What are the pros / cons. What are better options Mutual Fund or ETF.

Q: Hello 5i. I'm below on my fixed income. ZAG is almost 7% of my total portfolio but I am looking to increase this to almost 10%. Is this too high for a single ETF, and/or are you still happy with ZAG, or would you suggest an alternative. I'm looking for something fairly safe with a reasonable yield. Thanks again for your excellent service. John.

Q: I have a GIC maturing shortly in my RIF. Would like to keep the funds in some type of income/reasonably secure investment, but am having trouble accepting current GIC rates. I have been looking at ZAG, but admit that PAYM has also caught my eye. Could you compare these two and comment on your preference and why (other suggestions are welcome). Also, any comment on where interest rates might be heading over the next or so.

Thank-you

Q: ZAG is only 3 % of my investment portfolio. I am wondering if I should add more or sell and use the money to increase the weight in the other ETFs I owned. I have been in a loss position for a while and just wonder if I should continue to hold it. This is the only income ETF that I own and is inside my RRIF.

Thanks

Q: What will be the impact of the Bank of Canada's likely rate cut from 2.75% to 2% on the ZAG or XBB ETFs?
Is it better to simply buy bonds directly rather than ETFs?

Q: With inflation in Canada edging up, and concerns that tarriffs are inflationary, is it a good time to move to shorter duration bonds? The counter is that if a recession hits interst rates may decrease. What is your take on the timing of all this, and how best to position a bond portfolio?

Q: Canadian HISA accounts do not have such good yields anymore. And the income is taxed as interest. I was looking at my 2022, 2023 tax returns and the revenue from canadian ETF like ZAG, XSB, XLB was mostly ROC. If I’m not wrong, thus, much more tax efficient? Wouldn’t be a good idea to switch from HISA to XSB, XBB, etc to park money in the next few months?

Do you know if high-Yield ETFs are taxed the same way (ROC) ?
USD-HISA are more generous so the logic might be different.
Thanks.

Q: Hello,
I have a question about adding fixed income to a portfolio.
My registered portfolio is all equities, mostly large cap dividend payers and some growthier names thanks to 5i, reasonably well diversified, a little heavy on financials.
I am happy with the results and will be relying on it as my main source of retirement income in about 5 years.
I am thinking it is time to gradually add some fixed income, to decrease volatility somewhat and increase predictability, targeting a 70/30 equity/fixed income split over time.
Would like to keep it simple with ideally 2 ETFs, was thinking XBB or ZAG plus something else.
I see that the Canadian Money Saver portfolio uses XBB, CBO, CPD and XHY for fixed income.
What would you pair with XBB/ZAG in this scenario?
Is a US fixed income component a good idea?
What do you think of combining a passive bond universe ETF with an actively managed ETF/fund?

Thanks as always.

Q: ZAG holds more than 70% in government bonds (federal, provincial and municipal). Is there a similar American Aggregate Bond Index ETF listed in US?
Thanks!

Q: I use ZAG as fixed income ETF for my RRSP following standard recommendations. am i missing out by only using a Canadian ETF? Is there an ETF in CAD that would include US or global content?

Q: This is the bond portion of my portfolio. Would you recommend adding or swapping ETFs to enhance diversification and allocate funds to markets with optimal returns?

Q: In a best case scenario, I think 4 years of Donald Trump in power will be chaotic and discruptive in the US and globally. In a worst case, I believe the US is heading for internal unrest/violence, and the certain parts of the globe will be at war. If you were a 74 year old investor who has done well listening to 5i the last 2 years, how would you now hedge against these scenarios?

Q: Hi Gang
What are your 5 top Canadian income ETFs

Thanks Mike B

Q: I have these bond funds: PGF510, CVC, ZAG, XLB, along with mostly GIC's in my fixed income side of portfolio. Do these Bond funds pay interest the same as the GIC's or do they pay Dividends so I would get the Dividend Tax credit? All are in my margin account. Would any of these be worth adding to now that they have gone up somewhat? Thanks so much!

Q: Hello,

I need to increase the fixed income component of my portfolio. XBB and CBO make up 12% of my portfolio. Please suggest a few more CDN fixed income ETF's I could invest in. I am retired so a more conservative approach is what I am looking for.

Thanks for all your help.

Q: Which fund would you put more money into as I have only enough money for 1 ETF. I currently owned both in a RRSP and ZAG is in a lost position so could average down or add to VEE as the upsize looked better for this ETF than ZAG?

Thanks

Q: Bond ETF's like XLB have performed poorly in the face of peak interest rates and pending Fed rate cuts. Could you offer some insight as to why there has been recent weak demand for US treasuries, whether you see that trend continuing in the near term and at what point bonds may become a rewarding investment?