Investment Q&A

Q: Please recommend 5 ETF's for a young investor just starting her career and investing in her first TFSA. Thank you in advance.

Q: Hi 5i team,

My daughter and her partner are investing in their RRSPs through a work plan. They are in a number of Mutual funds, some with quite high MERs range about 1.5 to 2.5%. Also high redemption rates (some up to 5% in first year or two). I have tried to find the mutual funds from their statements, but mostly listed without codes so difficult to be certain of all data.

They have :
20% Balanced funds
47% Canadian Equity
13% Global Fixed income
20% Foreign Equity.

Amount invested is significant but not really high - includes 3 years of contributions/investment. I think they would be best to withdraw the money now and invest in ETFs. I don't think they need to similarly replicate the funds above in ETFs.

2 questions:

A. Any suggestions as to most efficient way to withdraw from these funds? Are there questions to ask that might help reduce redemption bite or should they just make the switch.
B. They are late 30's and 40 yo, so time horizon of approx. 20 years or more before needing money. They are interested in investing but are very early in this. Wondering what you would suggest for starter ETFs right now with bias towards growth. Perhaps you could suggest 4-6 ETFs that would give them age and time horizon appropriate investments.

Please use as many questions as needed.
Thank you in advance for your usual great service and the very helpful advice.

Q: Dear 5i team.
As I read through the recent Q's on the merits of owning laddered bond funds vs long bond funds (CLF/CBO vs XBB/XLB) couple of f/ups for you. Assuming rates have peaked, and downward is the consensus:
1) What is the upside for CLF vs XLB for example. How much of a move in bond prices would you estimate for each 50 BP move? (can you do same exercise assuming rates move higher?)
2) Since you like both XBB/XLB for long bond exposure, can both be owned, or should one be sufficient?

Many thanks for your help to understand the risk/reward here.

Q: These two have me scratching my head. I invested a few months back, believing that lower interest rates were likely ahead in 2024 and longer bonds would do well. After a decent start, they are drifting downwards which doesn't make much sense when no one seems to see higher rates headed our way. Is it de-risking going on, and other investments look better? Am I missing something here or is it just a case of having patience with the plan? Also, Happy New Year to all of you at 5i. al

Q: SRLN looks unsafe at first glance. the yield at over 8% p.a. looks high. Morningstar gives SRLN a neutral rating (forward looking) and 2 stars looking backward. Morningstar is often out of date, and there is better information at ETF.com. Your Bloomberg is not available to us commoners.

I ask this this question because bank-owned brokers make it difficult and/or expensive to buy bonds. Information and pricing on bonds are not easily searchable. Every time I force myself to look at asset allocation, the robotic tools I use scream at me that I am mad in that I zero fixed income. This brought me to look at bond ETFs and I acquired some USHY which looked decent, but that doesn’t quieten those pesky AI tools that help self-directed investors.

Is SRLN a reasonable enough proxy to add to the fixed income part of one’s portfolio? Or is it risky compared to other available US$ bond ETFs? I’d welcome substance in your response and if you care to add links to materials that pedestrian investors like me should look at, that could help. Many thanks.

Q: In many of the investment articles I have been reading Bonds are being touted as a good investment in 2024. Do you agree? If yes, what Bond ETF's would you recommend?

Q: Hi Peter,

With interest rates projected to go downwards, what are your top three picks in the U.S. and Canada for bond ETFs for the next five years?

Thanks

George

Q: Hello,

I am looking for a regular dividend paying fixed income bond ETF in Canada. I have a 5 year horizon. What would you suggest ? I currently own CBO.

Thanks.

Q: Hello
I have equal amounts in CLO and CLF. Wondering if it might be a good idea to swap one of these for the longer term XLB Bond Fund to hopefully play the downturn in interest rates? If so which would you swap and why? Is there a safer trade with equal potential with less risk then XLB?
Thanks
Jeff

Q: It certainly feels as though we are seeing the beginning of a new bond bull after the roughest two years since the 1980s-early 1990s.
Please provide you opinion on the above, as well an any other bond etfs that you follow.
Can you please provide you opinion regarding a bull market..
Thanks in advance
Rick

Q: Is it possible to choose a favourite for a 1-1/2 to 2 year hold with the expectation of a reasonable yield while rates remain near current levels, and a capital gain as (if) they begin to fall?

HBND vs XBB or something preferable?

I'm assuming they all provide yield that will be treated as interest and not eligible divs. If so, preferred account type?

Thanks,

Q: I am considering getting into bond ETF's, given that we are apparently hitting pause on rate hikes and will potentially begin to cut rates in 2024. I realize that you cannot predict timing but would you consider this a good time to be getting into bonds?

What is your view on bond ETF's FCGB and DXDB, or can you offer another bond ETF to consider?

Thank you
Tim

Q: I want to take advantage of capital gains in bonds that I expect to occur as rates decline but I am unsure whether I will get that benefit with an ETF like XBB as much as with individual bonds. Can you tell me how that works with the etf? I assume as they buy new bonds at to replace their maturing ones, that will take away the capital gains advantage as they buy them at par in the higher rate market.

Q: I am looking to simplify the management of my RRSP and my wife’s RRSP by shifting from stocks to ETFs. I’m thinking that it would be easiest to manage if I have 1 ETF for Canadian Equities, 1 for US equities, 1 for International Equities and 1 for bonds/ fixed income.

We have a 10-15 year time horizon so ETFs with a growth orientation would be preferred.

Thanks
Greg



Canadian Equities
US Equities
international Equities
Bonds/ fixed income

Q: Hi there, with all the buzz about fixed income, Gics, bonds etc. I feel like maybe I should be increasing my exposure in my RRSP. I am retired and definitely have a diversified portfolio more slanted toward div paying solid equity companies.

I know you can’t give personal advice but what might be a good way to tweak my portfolio to increase fixed income exposure for 5-10 years ie gic or bond ladder, ETFs, individual bonds or?

Or should I stay in dividends and forget about it?

Ok thank you!

Q: Hello 5i, common question for you but I have very little bond exposure and was looking to start building a fixed income portfolio. Can you give me your current top 5 bond picks (assuming ETF's). This can be USA or Canada bonds.

Q: We have 30% allocated in our registered accounts for fixed. (currently 10% each for CBO, ZAG and XBB) Are these the best options for today and the next year(s)? Also see XLB recommended recently and wondering if we should be adding or replacing any of the above?
Appreciate your opinion
Thanks Doug

Q: hi,
can I get your opinion on the Aug. 9th Globe and Mail article by David Rosenberg and Bhawana Chhabra, "...It's time for investors to revisit their asset mix." And are you able to provide a few Canadian dollar ETF's to buy ( US treasury index? other? ), if you would in fact recommend that?
thanks, Chris

Q: Hi there,

Can you please suggest Canadian-listed ETFs for the bond portion of a long-term portfolio? I'm interested in diversification.

Thanks,

Chris

Q: I listed in descending order securities that under performed since their 2022 highs. Please rank the securities in order of the best chance to recover their losses when we get back to the risk on mode. Thank you