Investment Q&A

Q: Thank you for your answer regarding the Can $ interest payment of ZAG. I would appreciate it if you could also please respond to the last part of my question, re XBB or ZAG purchase decision. (which I am copying below). The amount of purchase being suggested by the Portfolio Analytics is a significant (to me) value of $240,000, so I would like to get it right.
"Are there other pros/cons I should be considering ? Also, any thoughts on purchase timing of these bond etfs - or would you recommend a gradual entry over the next 6 months or so?

Q: Your Portfolio Analytics recommendations was a good reminder that I really should increase the Fixed Income component in our RIFS by a fair amount. There were 3 categories each with two suggestions: 1) "Regular" Fixed Income 2) Fixed Income Defensive Diversifier 3) Fixed Income Aggressive Diversifier. In the 1st category - what I call "Regular fixed income, Two suggestions were given : ZAG and XBB. I was going to select ZAG as it has a better yield (3.86 vs 2.83 %) and a lower MER (.10 vs .19), however, I also notice that the distribution for ZAG is paid in US $. We do not have a significant need for US $ and do not have an active US account . Will the cost of conversion from US to Canadian $'s offset the better yield offered by ZAG ? Are there other pros/cons I should be considering ? Also, any thoughts on purchase timing of these bond etfs - or would you recommend a gradual entry over the next 6 months or so?
Many thanks as always.

Q: I have a well diversified RRSP which has me set. However, I would like to make more that 1.6% interest in my non-registered account. Can you recommend 2 ETFs for my non-registered account to make some travel/leisure money over 1 year?

Q: We have a diversified RIF and are now in our 70s . We have 6 ETFs and have $20,000.00 invested in VE. We have equities invested across all sectors some sectors a higher percentage than others. Do you feel it is necessary to have monies invested in Europe when we could obtain better income investing in possibly Bonds or preferred shares. Safety and Income are important now to us . Any recommendations.

Q: A lot of research and writing has addressed the reality that it is *very* hard for an active fund manager/stock picker to beat the indices on an after-fee basis.

But what about the bond market? Does 5i know of a body of research/evidence that explores whether or not over time, an active bond trader/manager could beat a passive bond index fund such as XBB/VAB/ZAG? Should I go passive or active with my fixed income allocation? Which actively managed fixed income ETFs do you like, if any?

Thank you.

Q: Should I buy a 2 year GIC at 2.8% or a bond fund say XBB.?
Can you also explain your reasoning.

Q: ..given growing expectations of a Canadian recession, i'm thinking of moving away from utilities into fixed income. how do you expect XBB, XSB and HFR to perform in comparison to ZWU if a recession occurs. thanks, great service.

Q: Hi 5I,

Could you please rate the following bond ETFs.
VAB, ZAG, XBB.
I'm thinking about XBB because I can trade it for free on my itrade account.

Thanks.
Steve

Q: I already have XBB, TIPS, HFR , would TLT be that much different from XBB other than having the currency exposure. Was thinking of buying TLT for more protection against poor markets or if interests rates stop going up. Could I just add to my XBB position to achieve same results.

Q: I have redeployed some cash when the market was down but I still have a 12 per cent weight in cash. The cash is in TFSA's, RRSPs, and an unregistered account. While that money is set aside in case the market takes another hit, what can I do to get a least 1.5 to 2 per cent return (to stay even with inflation)? Or should I just go back in the market and maintain only a 2 or 3 per cent of cash? I don't plan to need any of these funds for at least a couple of years.

Q: With the prospect of rising rates should an investor sell their bonds or bond ETF's. and if so, is their a better place to park money? Thanks, Bill

Q: Good morning. I would like to increase my fixed income allocations and would like suggestions on where best to invest additional cash. I already have enough in GIC’s and our pref shares have been suffering of late but we are below our target in the fixed side. Thank you.

Q: I am looking for good bond ETFs. Your comments on CLF, XSB, XBB and FTB. Given a possible interest rate increase I have leaned toward short exposure.

Q: Given the uncertainty in short term market direction,I have 50% of my TFSA in cash.I believe Canadian interest rates are not going to rise.I am considering the choices listed above, unless you can suggest others.I also have some cash in my US$ RRSP and am considering the Vanguard fund for this cash.US rates may climb further,but not much.Perhaps you could rate these according to risk.
Thank you.

Q: I am an old man (86) sitting on a lot of cash ($800.000) and I am considering on purchasing the following stocks equally invested what I think if is a conservative based portfolio.
VFV yield1.7%,XIU Yield 3.2%,CBO yield 2.61 %, XBB yield 2.9%,CBO yield 2.61 %
Would appreciate any comments you may have. I am looking for yield and relative safety. Thanks, Bill

Q: Realizing everyone's situation is different, generally what percentage do you think one should have in bonds? Thanks, Bill

Q: Team, I’m looking at holding 15% of my portfolio in a low risk fixed income investment. What would be suitable securities to buy?

Q: I am still spooked out about the markets and sold all my stock positions yesterday. I now have a significant amount of cash and would like to deploy it the Bond Market which I think is a safer place at this time. Would appreciate any recommendations you might have as to how to invest the money. With thanks, Bill

Q: I AM FED UP WITH BONDS. DURING THE LAST 5 YEARS I HAVE LOST IN ALL OF THEM .I DO NOT UNDERSTAND WHY ALL ADVISER SUGGEST BOND FUNDS AS A PART OF INVESTMENT. ONE HAS BEEN LOOSING MONEY .I APPRECIATE YOUR COMMENT AND ADVISE RE ABOVE STOCKS.EBRAHIM

Q: I have recently paid off a sizable chunk of consumer debt, and now have a few thousand bucks at my disposal each month. I want to invest most of this in my TFSA so that I can catch up to my lifetime limit, and thereafter invest at a monthly amount equivalent to the annual limit. I've been thinking of investing most of this money in ETFs, but am a bit confused about the advice I see online. In your view, what is my best strategy here? Invest in one or two solid ETFs? If so, which do you recommend? Often, the ETFs I see experts recommending don't seem all that appealing. They hover at the same price for years and years and typically don't have much in the way of other types of yield. Anyway, I'm a bit confused and just wanting to have a basic plan for moving forward over the next year or two in my TFSA.