Investment Q&A

Q: I have a larger cash account with a 10+ year horizon and would like generate capital gains only and no significant dividends. I like the Horizon TRI funds but would also like to invest in some individual stocks. Could you recommend some good stock (or other ETFs) that pay out little or no dividends.
Thanks!
Grant

Q: I have purposely maintained my non-registered foreign holdings (principally US) below $100K simply to avoid the hassle of reporting to Revenue Canada and completing a T1135. I now find that continuing to do so will leave me underinvested in US markets. Is there a way to get broad US exposure (i.e. S&P 500) with an ETF that would not be deemed as foreign property? Would HXS or HXS.U accomplish this? If yes is there an equivalent Nasdaq ETF?

Q: Peter, I hold these S&P hedged ETF's in different portfolios. The total fees for HXS are about twice that of XSP and VSP probably due to the swaps. When I look at the performance of these ETF's, XSP and VSP are almost identical, but HXS sometimes lags and sometimes outperforms the other two. I am not sure why that is, can you comment. Due to the higher fees on HXS, does it makes sense to own this ETF in a registered account?

Q: Hi Peter

Yesterday Horizon launched HULC and HXCN total return ETF's. Will appreciate your expert opinion on them against available ETF options from other providers.

Q: Hello. If I were someone who:

1. Wanted to take my time researching and selecting stocks to purchase (perhaps weeks or months between each purchase), and
2. Doesn't yet know how much I'll be investing in Canadian stocks and how much I'll be investing US stocks, and
3. Will be exclusively investing in registered accounts (TFSA and RRSP).

Is it a sound strategy to simply buy one or two dual-listed, broad-market ETFs (like HXS and HXQ) in order to just be in the market while I take my time selecting stocks? This gives me the flexibility of selling the shares in either currency when it comes time to make another purchase, avoiding hefty currency exchange fees.

Or should the increased expense ratio of these dual-listed ETFs versus the cheaper alternatives like IVV and QQQ be a concern? Are there any other flaws with this strategy and/or is there a better strategy suited to this scenario?

Thank you!

Q: I have a non-registered account, with 8-10 years before the funds are needed. To minimize tax, we would like focus on 100% capital gains, if possible. Can you recommend some ETFs or individual stocks? We have been looking at Horizon's corporate class ETFs. Thanks for your continued excellent non-biased reports!! Grant

Q: Can you recommend Horizons Corporate Class ETF ? Are volume large enough?. Thanks. Martin.

Q: I think HXS and ZWH have similar assets.
Do you agree ? Because I carry forward capital losses, I think I should buy HXS because it pays no dividend, and I can apply future capital gains against losses accumulated. Looking at the performance of both funds, I should do better buying HXS, does this make sense. Also please comment if one or both of these funds are worth buying at this time .
Thanks

Q: Hi, I currently hold this ETF in my TFSA. Can you please explain the change recently made and how will it affect my portfolio going forward?

Q: It appears that this ETF has changed recently as required by the Liberals. Is this a taxable conversion or is there an option to treat this otherwise?

Q: Hello 5i,


I am wanting to move more into US and rest of world, as the analytics program directs me.
Due to a sale in my tfsa, i will have US dollars that i can then put in my non registered account. ( i will fill the tfsa once afain from that same non registered account). I was wondering what to buy with these US dollars, though. I dont want to lose too much of. The divident break we have for US stocks in the Rif, so i was looking for low or no dividend yield candidates. One problem encountered is that in my non Canadian portfolio, i am moving away from individual stocks and towards etf's. Harder to find low or no dividend payers.

VEA was one I was looking at.

In the 5i portfolio tracking and analysis it says that vea has a yield of 1.89, which although not ideal, maybe something we could live with. When i go on the bmo site, though, it seems to indicate a yield of 2.99, which is becoming less livable.

I imagine you are riht about the dividend. But, would like to be sure. Also, do you see the 1.89 yield as being too high for a non registered account? Thanks once again

Q: I understand there are some ETFs or possibly mutual funds that invest in such a way that dividends are captured as capital gains, to reduce income tax. But I also understand the government is considering legislative changes to prevent this type of structure. Do you have any insights/recommendations on these products?

Q: Good morning,
This is a follow up to one of my previous questions re: Horizons Total Return Index ETFs and more specifically HXT:CA and HXS:CA that I intended to purchase as long term core investments in my grand childrens' in trust accounts prior to recent proposed changes in the recent federal budget affecting the favourable tax treatment of Horizons Total Return ETFs (No distributions).
It is my understanding that Horizons ETF Management Canada plans to soon (end of Nov 19) restructure HXT-CA and HXS.CA along with several other of their ETFs into Corporate Class funds.
Given that one of the main benefits of Corporate Class funds is its ability to minimize and defer taxes, would you consider these Corporate Class funds and the Horizon Corporate Class funds in particular, to be a suitable long term hold investments for my grand children's non registered in trust accounts and if so would you please provide a few recommendations?
Thank you for thoughts on this.
Francesco

Q: In response to an earlier question you indicated that Horizons would be converting HXS and other ETF's to a corporate structure because of federal government action. Would this new structure be suitable for an RRSP? I am looking for a Canadian ETF invested in US equities for a registered account where I do not lose the withholding tax and also like Horizon products thus far. Thanks.

Q: when I put these three on a chart together (Thompson-Reuters feed on webbroker), for a specified period, hxs shows a much greater return than zsp which shows a much greater return than xsp. Five year chart 93%, 77%, and 45% respectively. This charting service does not show total return so some of the difference between hxs and zsp will be the dividend (included in hxs but not zsp). Some of the difference can be explained by hedging of the currency on xsp but not on hxs or zsp. Given the difference in five year returns there must be something else. Suggestions?

Q: Given a 15% withholding fee for US investments, which S&P based index fund would be the most favourable to hold in a RRSP in Canada. Either HXS, VFV, XSP, ZSP to reduce the yield drag on non-recoverable withheld taxes. Of course HXS has none withheld to date but does have a pending distribution perhaps at year end.

Q: Hi, I currently have $11,500 to add to my TFSA with a long term horizon. I currently hold CNR (2.53%), NTR (2.88%), PLC (5.04%) PPL (2.98%), TD (4.21%), V (4.71), WCN (6.15%), XLV (3.31%) MAW 104 (25.11%). I am wondering if I should add to the current companies or might you have any other suggestions?

Q: For the purpose of simplicity I would like your opinion on these 3 ETF portfolios.
My idea is to rebalance 1 / year.
non registered: VFV 30% VDU 30% VAB 40%
TFSA: VFV 50% VDU 50%
RRSP: VOO 30% VIG 30% IWO 30% VAB 10%
Any suggestions as to changing the etf's used for better tax purposes ?
Are there better etf's that you would recommend using?
Thanks for your help .
Victoria

Q: Good morning,
This is a follow up to my previous question re: Horizons Total Return Index ETFs and more specifically HXT:CA and HXS:CA that I intended to purchase as long term core investments in my grandchildrens' in trust accounts prior to recent proposed changes in the recent federal budget affecting the favourable tax treatment of Horizons Total Return ETFs (No distributions).
I'm still searching for a few great investment ideas that would be suitable as a long term hold in my grand children in trust accounts. IWO and QQQ were mentioned as potential candidates given their relatively low distributions but given that the in trust accounts are already set up to hold investments in CDN $$$ and to offset currency risk, could you please recommend three or four ETFs, stocks or combination thereof that distribute little or no distributions and that you believe would be suitable as a long term hold in my grandchildren in trust accounts. My intention is to invest approximately $50K in each in trust account. I thank you in advance and look forward to your specific recommendations.

Q: Since the tax benefits for HXT, HXQ, HTB, HXS have or will be diminished, is there any reason to continue to hold them or should we be switching to other etf's, is so which ones would you recommend?
Thanks for your service.