Investment Q&A

Q: Just doing some more work on ZWE...confused on some beta #s. Globefund has the beta = 2.07. Fundata has a 3 year beta of 0.53. 5iR has it at 0.91. Can you please provide some insight...is it simply different timeframes? I am trying to derisk my portfolio (reduce beta), while at the same time increase dividend income...adding to ZWE seems logical, but the beta numbers are confusing. Thanks...Steve

Q: I have a half position in ZWE...good time to add to it? My understanding is increased volatility is good for the covered call option. Is there any chance of the dividend being reduced? I am retired.

Thanks...Steve

Q: I currently hold the above etf's, which totals 25% of portfolio. Equities held are US and Canadian and am invested in all sectors with financials@17%,Tech 10% and Utilities 8%. Remaining 40% equally allocated to the other sectors. Am looking at reducing ETF's and would appreciate your thoughts on which ones are good holds and which could be sold due to over diversification! Thanks for your valuable input!

Q: I am a senior and rely on my dividends for income in a RIF. I would like to know what I should do with ZWE, I own a 4.8% position and I own ZDI 6% position. DO I sell one and combine? I have a balanced income portfolio of 5i approved stocks with a 10% weighting in ZWH. Thanks for all the help, I use you for 99% of my decisions. Great job on the new web sight. Gary

Q: Further to the previous question regarding withholding tax on foreign stocks inside a TFSA...

Is this tax on foreign dividends paid before receiving the dividend payment (what is deposited to my account is the after-tax amount) and is there any witholding tax on gains when a foreign investment is sold?

Thanks again!

Q: Would there be any withholding taxes on dividends from these products when held in a TFSA ? Joe

Q: Regarding asset allocation, I need to do some trimming and adding. I need to trim RY and use the proceeds to add to ZWE. In a perfect world, I'd like to nail both dividends, so I wanted to bounce the plan past you.

The ex-div date for RY is Oct 25 and the ex-div date for ZWE is Oct 27. So that means I would get the RY dividend if I sell on or after Oct 25. I would get the ZWE dividend if I buy on or before Oct 26. Did I get this right? Thanks, Steve

Q: I am looking to add an ETF with european exposure and a relatively good dividend. Could you recommend any that fit the bill.

Thanks
David

Q: I am a retired, conservative dividend-income investor with a company pension, CPP, annuities, Fisgard Capital and the following equities:
1. 17% Mutual funds (RBC Cdn Equity Income, Sentry Cdn Income, Sentry REIT)
2. 10% ETFs (ZLB, XIT, ZWE)
3. 41% stocks (listed above)
4. 32% fixed income (annuities, Fisgard, but not including my pension nor CPP).

I plan to reduce my Sentry Cdn Income holding from 9% to 5% and purchase ZWC. The benefits would be a) saving $1k in hidden MER fees, b) receiving an extra $1k in dividends and c) a better asset allocation. I like the covered call strategy that ZWC provides, as well as the 30 companies inside the ETF.

Question = is this the right ETF product? Are there other Canadian Covered Call ETF choices that offer this diversified asset mix that I should consider? Are their other ETFs that have slightly less financials, less utilities, and more industrials that would result in a better asset allocation for me?

Thanks for your help...Steve

Q: I am a retired, conservative, dividend-income investor with a well diversified portfolio, including a company pension, CPP, annuities, Fisgard Capital, and equities via RBC Cdn Equity Income, Sentry Cdn Income, Sentry Global REIT, ZLB, XIT, AS, ALA, AQN, BCE, BNS, CSH, CGX, ECI, FTS, PBH, PEY, ABT, RY, WCP, WSP and a small position in Sprott Energy. Looking under the hood, this portfolio has 33% of its value in non-Canadian assets, which is at my comfort level.

Question 1 = I know portfolio make-up is very personal, but when is there too much foreign content in a conservative retirement income portfolio? Adding ZWE pushes my foreign content over 35%.

Q2 = most of the distribution for ZWE is capital gains, ROC and about 30% interest income. I plan to put ZWE in my cash account...make sense?

Q3 = I already have roughly 22 securities, which is plenty enough for diversification. I am hesitant to add more, but I think ZWE makes a good fit. A second alternative would be to continue to "trim and add" as the allocation #'s make sense. A third alternative would be to simply add NFI to top up my industrial allocation.

Thoughts please...thanks. Steve

Q: I am a fan of covered calls. I am retired and like the income, tax treatment and downside protection. In addition I like the diversity an ETF brings.
I hold all the above but am looking for more diversity. Are there equivalent US offerings? Does BMO have competing products that are more diverse?
Thanks

Q: I am considering converting the holdings in our investment account from the couch potato to a dividend portfolio consisting of the 4 etfs listed. In both cases cash replaces the bond component. I want to draw a larger dividend from the portfolio. Do the 4 etfs provide satisfactory diversification and how do you see the pros and cons of implementing this change. Thanks

Q: What is 5I's current position on hedging the C$ when buying/holding Int'l ETFs. Do you suspect that this is a short-lived situation?

Carl

Q: I hold small weightings in cdz,zwc,zwh,zwe as well as holdings in Canadian utilities. I am thinking of replacing cdz with either zdh or cyh to increase my international holdings. Would you please look under the hood of zdh and cyh and would you recommend this move or do you have another recommendation?. Thanx. Great service.

Q: Hello 5i,
I am looking to increase my U.S. and International exposure. I currently hold VIG-N, JNJ-N and a number of Canadian ETF's which also hold U.S. equities. I am open to either USD or hedged products and would like a yield in excess of 2.25% if practical. Since I look to yield for income I was considering ZWA. Would you have any other options you would prefer over ZWA?
On the Int'l. side I hold CYH and ZDI and am happy with both; I held VEE at one time, but the yield is on the lower side for my needs. Should I just increase my holdings in these two or, again, do you see a better option? I could move out of one or both of those if you think there is a more compelling option I'm missing.
As always .... thanks so much for all of your help - very much appreciated!!!
Have a great summer!!
Cheers,
Mike

Q: I'm considering various ETFs (mostly from Vanguard) for global exposure and I just wanted to get your thoughts:

Asia/Pacific - VPL or VAH
Europe - VEH or ZWE
EM - VEE or VE
USA - VUN or VIG or VGG
Global - VT, VIGI, VYMI, VXC (would it make sense to buy all of these, or is there too much overlap?)

These would all be held for many years. I don't need the income from dividends, but a decent yield is always nice. Currently wondering about things like hedged vs unhedged, fund size, growth potential. Thanks for the advice.

Q: My daughter has these 4 ETFs in equal weighting in her TFSA. Do you think she needs more diversification? Would you add something else with future contributions or just add to her positions when opportunity arises? Thanks for providing your great service.

Q: Hi Team I am looking for both ETF and stock exposure to Europe. The above two ETF's seem like good choices? Would you recommend them or do you have some other ETF preferences? Also are there a couple of European stocks you would recommend? I currently own LXFT, Luxoft and am looking at EEFT. Euronet. Thanks Team Chris

Q: I presently have no exposure to Europe in my portfolio and wish to add a 5% position by buying a ETF. Should I buy edge or not edge ETF, seeing the weakness in the currencies? Income is not the primary goal but I want good total return of course. I prefer good quality companies, participating in the recovery as opposed to momentum plays or startups. Could you suggest one or two Canadian ETF.

Q: I hold the above in a RIF and have weighted to cover the required withdrawal amount with dividends. Does this sound appropriate and if not, would appreciate your thoughts. Do you see a major loss of principal if markets continue its downward trend. Thanks for all your help.