Investment Q&A

Q: Hello,

I own the whole list (weights 1% to 2%) thinking I was being diversified but maybe went too far.

1) I am on the right track to reduce to about 3 names?
2) Which names optimise income?
3) Alternative names that I might have missed?

Many thanks!

Q: Among banks, 5i seems to favour TD and BNS, though since 2019 patient investors have done well with just about any of the Big-Five-plus-NA.

But supposing interest rates are now set to rise, won't banks tend to find a trading range? In which case, wouldn't ZWB, with its covered call component, provide greater total return? Or do its MER and trading expenses claw back too much of its income?

Interestingly, since inception, ZWB's share price seems to have done as well as (for example) BNS, in spite of the potential for its positions to be called-away.

Q: Is there any tax implications on buying covered call ETFs like ZWU, ZWB in TFSA?

Q: Hi,
I have been considering these covered call ETFs for income as a long term hold. I am recently retired. On researching them however on their BMO fact sheets I see a MER of .71% and total expense of .92%. As well in the holdings on the fact sheets I see only about 0.1% of their holdings are classed as covered calls. Seems like a lot to pay in total expenses for only 0.1% of holdings in covered calls. A pure bank ETF or utilities ETF or would be much cheaper. Am I missing something?

Q: Looking to add more financials and sell off some technology. What would your choice be for 3-5 year growth…. SLF or the more conservative ZWB? Thanks

Q: Is this ETF a safe way to invest in the banking sector in a RRIF account for income and some growth and do you believe the strategy used by this ETF can outperform other ETF such as ZWB or ZEB. Can you suggest a couple of alternatives ETF that are more appropriate for a RRIF or do you feel it is better to just own the individual banks.

Q: Where do you see the greatest value in the market these days? Cdn Banks always seem like a go to when in doubt, ZWU also seems reasonably priced. Any thoughts on ETF's or specific companies that are positioned well? Thanks as usual.

Q: Good morning,

I am assuming with the pandemic easing and hopes some sense of normal is coming that banks will be allowed to raise dividends more regularly.

Would you see a need to switch from ZWB to FIE ?

Thanks
Jimmy

Q: I have a portfolio weighted to US Tech Growth stocks. About a year ago, I sold some companies and moved 10% of my cash into 1) Gold (HEP) 2) Short term bonds (HFR), and 3) a Banking ETF (ZWB) to diversify. These three have proven to be losers for me. Does it make sense to keep any of these three for continued diversification or are there better ways to round out the portfolio with a bit of a safety net? Thanks!

Q: Which of these ETFs would you prefer for financial exposure? The fixed income component of FIE contains 20% CPD, which has had a nice run and is now approaching a 52 week high, 10% XCB (corporate bonds). The remaining 70% is banks and lifecos. ZWB, on the other hand, is 100% banks, with covered call premiums.

Q: I need to set up an annual income for my wife, for next 25 years. In TFSA and RRSP, using only ETF's. Dividend growth and HY dividends. Should have 5% yearly and 10% total return. Can you recommend the appropate ETF's. Vanguard/BMO/ I Shares (only)
Please NO EM ETF's One European OK--- Key is 5% annual income. Investment .5M$ It has to be buy and collect for 25 years. No input by my wife.
Thank you
Cec

Q: hi guys are these good to buy and hold do you think there dividends are safe

Q: Looking for the best of both worlds ... income and some growth.
AND not finding bonds very compelling due to low interest rates.
AND as part of my holdings in the financial sector.
Would it make sense to buy and hold ZEB (4.7% yield) and ZWB (6.65%) ?
My thinking here is ZEB would capture more capital gains once interest rates start to move up and bank shares rise in value; while ZWB captures a higher yield in the meantime?
Of course I am also open to a better suggestion.

Thanks for your help.

Q: Hi, As a retired income plus some growth investor which order would u add to or delete the above under 1% positions to tidy up my portfolio.

Q: Hi General investing question. I have both ETF and actual stocks that are in the ETF. Less than 5 years away from retirement so still looking to build my portfolio. What's your opinion on holding ETF to accumulate income or buy the actual dividend stock and get both income and (hopefully!) growth? Thanks guys

Q: Looking to add some tax efficient income to an otherwise well diversified portfolio. What do you think of the above mentioned ETFs? Could you suggest a couple of more?
Thank you!

Q: Hi 5i,
We are older retirees and have held ZWB and ZWH
in our RRIFs for income for many years. I just ran a Quicken report on performance and neither performed particularly well. I am about to switch ZWB for ZEB and ZWH for VGG. We can live without the monthly covered call income and I am assuming the replacements will outperform the covered call ETFs in a recovery. Your comments or suggestions are welcome. Thanks for the service.
Ted

Q: Hi gang, I am looking into buying $11,000 for my daughters TFSA Acct. Should I buy $5500. BMO & 5500. SLF. Or 11,000. Zwb.And zwu or could you suggest me otherwise. Lots of time 15-20years. Open to any thoughts. Thanks be safe.
Alnoor

Q: Hello Team, I have quite amount of ZWB in registered account. I am thinking of selling and purchase individual holdings in the ETF - 4 banks ( TD , RY, BMO, BNS ), SLF, IFC, BAM.
Do you a see material benefit to this move from overall return perspective or just keep holding ZWB.
Thanks

Q: Hello

In support of Carl’s inquiry re zwb vs zeb performance similarity......I was watching the same positive correlation despite so many being negative on covered calls in up market.

Firstly, Carl should go to BMO etf website where they have an excellent webinar explanation of how the cc etf zwb, ZWC have been managed to benefit investors during the up side of the market.
Secondly, as it was explained......the simple answer to positive upside correlation (may not be permanent)..... It was achieved through extending out the option strike price to avoid shares being taken away, while at the same time experiencing the same or higher option premiums. The option premiums expanded and they played it well.
Active management in volatile market paid off in this case.
Dave