Investment Q&A

Q: I am beginning to swing trade ETFs. Which do feel more closely mirrors the SPY since one cannot buy the SPX? Feel free to mention others I may have excluded but should be considered.
Putting aside any tax implications or type of account (ie: registered vs non-registered)
Considering the state of the C$ and the price of oil, it would seem more logical to go unhedged , what are your thoughts?

Q: From a tax perspective, does it make a difference where I hold XUU? I'd like to put it in a non-registered account but I'm wondering whether there is a tax benefit to put it in my RSP.

Thanks,

Q: Dear 5i,

XUU has a reported MER of 0.07% and consists of 4 underlying US ETF holdings.
Is an investor paying two layers of MER's when owning XUU?
Vanguard has a competitive ETF called VUN which has a surprising higher MER
of 0.16%. Which ETF would you recommend and why?

thanks

Q: I have been investing in ETFs for several years, using a simple 5 ETF portfolio which includes VCN (27%), XUU (27%), XEF (19%), XEC(7%), and ZAB (20%). When I use the portfolio analytics, the suggested ETF portfolio includes about 15 ETFs. Just wondering what if the added complication of the additional funds is worth the effort. I assume that yours has better downside protection as it reduces some of the concentrated sectors and perhaps has better returns? My portfolio has grown in size over the past years so I am ok with the additional work to manage the portfolio, just wanted to better understand why.

Thanks,

Q: Good morning 5i,
In the interests of simplifying my financial affairs for those who may have to look after them at some point, I have been moving in the direction of efts in my rif accounts on the US side. Up to this point I haven't considered doing the same for Canadian stocks, for two reasons: One is the capital gains that must be paid, as they are in a taxable account for the most part. Second, because of the fear that Canadian efts, like the Canadian economy, concentrate on only a few sectors. I thought, therefore, that I could simply make up my own etf out of individual companies that I buy. I can see, though, that one could suffer a real loss if one of these blew up, something like SNC Lavelan, which had previously been a staple in Canadian portfolios until recently. Also, there is the difficulty of managing these stocks by someone else, not used to doing so. I could approach it over a number of years to avoid some of the capital gain problem. So, I was wondering what you thought of this move in general? Also,I would appreciate your view on the relative dangers of holding Canadian efts? Which Canadian efts would be the best, general market or more focused? Appreciate greatly your reflections on this question.

Q: Other than VFV , can you please recommend a US etf that you like ,that sells in Canada
What are your thoughts on XUS.
Thank you

Q: Hi 5i,
The majority of my portfolio (70% - i.e. everything non-Canadian) is invested in XAW & XUU, which I add my savings to regularly to keep my geographic allocations where I want them.

I will shortly be receiving a sizable (to me) lump sum from the sale of a small business and will be putting most if not all of it into my portfolio. My question is about currency hedging on ETFs like the ones I use. I don't have any hedged investments now. I've read everything I can find on the subject and it seems smarter money, especially with long term investment horizons, stays away from these hedged options.

I know that fact alone probably answers my own question. But, with a sizeable one-time contribution, I cant help wondering if our current 75/76/77 cent dollar might be hovering at its lows, and maybe hedging should be considered? Looking for your opinion on that subject, and also how you feel in general about the two ETFs noted above. Any better suggestions?

Thanks so much!

Q: Please correct me where I am wrong, but these two ETF's track the same index (un-hedged US total market), but in spite of XUU having a lower MER, VUN seems to be the more popular choice, as well as seems to have a higher amount of daily trading volume. Any idea why?

Q: I have shares in XUU in order to get broad unhedged US exposure. This ETF is small with low liquidity, but has only minor bid/ask spreads with large number of shares available for trade. Do you have any concerns with the low liquidity? Is this a good ETF for US exposure?

Q: Hi Peter and Team

What Canadian listed ETF would you recommend today for US market exposure for the TFSA of a thirty year old with a long term time horizon? Would your answer be any different if it was for an RRSP where the 15% US withholding tax was not an issue? There seem to be hedged and nonhedged versions of all of them so would you recommend a hedged version now with the USD so strong?

Thank you!