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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

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
Read Answer Asked by Richard on September 19, 2017
Q: Just a comment to Nino's earlier question about CDZ: at the end of February 2017 Aimia was the largest weighting at 3.15% of that fund (according to iShares website). With the loss of the Air Canada contract and subsequent cancellation of the dividend it would have been delisted from the index (can't find a link to that on S&P though). Seems to me there would be recent losses and distribution cuts to the fund especially from Aimia's fall plus any other changes in holdings. Fair to say situations like that make yield-driven weighting riskier?
Read Answer Asked by Stephen on September 19, 2017
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.
Read Answer Asked by Steve on July 26, 2017
Q: During the Spring I liquidated my CDN Equity portfolio. I wanted to move away from managing indidual positions and move to a more passive approach. Then I read Ryan's excellent article, Why it's almost impossible to be a passive investor in Canada. I looked at HEW; but it is very small with only about $12m invested. Are there other ETFs that do an equal weight S&P 60? I also am considering VCN and CDZ. I also looked at Two mutual funds, Mawer Canadian Equity and Lester CDN Equity Fund. There are High Conviction funds available; but with very high MER's.
Would you please recommend a portfolio structure that would meet my needs, I am a conservative senior. Please have the suggestions add to 100%.
Thanks Guys for keeping us thinking outside the box.
Read Answer Asked by Warren on July 20, 2017
Q: Can you give your thoughts on CDZ in light of the following Globe commentary (similar to other blurbs I've seen in the Globe):

"And another thing: The way some dividend ETFs weight their individual constituents is a bit nuts. Take the iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ). Choosing stocks that have raised their dividends regularly, as this ETF does, is a great strategy, but assigning the largest weightings to stocks with the highest yields is a problem. Why? Because a high yield is often a sign of a struggling company whose dividend is unsustainable.

Case in point: At the end of April, CDZ’s largest holding was Aimia (AIM), which at the time yielded 8.8 per cent. But the loyalty plan operator’s shares collapsed in May after Air Canada said it would be parting ways with Aeroplan, and Aimia recently suspended all dividends. CDZ’s top holding now? Corus Entertainment (CJR.B), another struggling company that yields about 8.7 per cent and hasn’t raised its dividend since January, 2015."

https://www.theglobeandmail.com/globe-investor/investor-education/im-still-waiting-for-the-perfect-dividend-etf/article35453106/

Would you recommend a switch to a different ETF for broad-based Cdn exposure in an RRSP? What alternatives do you like that are not over-exposed to financials/materials?
Read Answer Asked by Chris on July 14, 2017
Q: Good morning from the West Coast. My question is about diversification. I have purchased CDZ. I would like you to recommend an equivalent ETF for the USA please.
Thanks
Rick
Read Answer Asked by Richard on July 14, 2017
Q: First of all,many thanks for your valued services.My granddaughter is starting her first investing at 23 years old and possessing $6000.We assume she should open a TFSA and would like your advice as to what to put into it. Thank you, Anne.
Read Answer Asked by M Anne on June 28, 2017
Q: Just to clarify further on my previous question. How are the dividend growers valued at right now compared to historical lows/highs/averages. So say CDZ (or something similar) now vs. historical. Wanting to understand how overvalued they may be compared to historical lows/highs through the economic cycles.
Read Answer Asked by Husseinali on June 05, 2017
Q: In order to avoid individual stock risk, my wife (retired) has asked my opinion on investing 30% of her total portfolio in 10% each of Canada, Europe, and the U.S. (The remaining 70% is composed of 5-year laddered GIC's) I have suggested the following... Canada would be broken down into ZWC and CDZ (on a 40/60 split), Europe would be broadly broken down into ZWE and XIN (40/60 split), and the U.S. would be broken down into ZWH and CUD (40/60 split). What do you think of this strategy? Would you recommend different ETF's to balance the covered calls for the three geographic areas? Thanks!
Read Answer Asked by Paul W on June 02, 2017
Q: Can you provide some data points around dividend "growers" companies and if not available dividend companies in general. Current P/E forward looking vs. historic average and ranges. Just wanting to get an idea on how much higher than the average these stocks are currently compared to historic levels, how overvalued they "may" be to help assess downside risk. Thanks!
Read Answer Asked by Husseinali on May 31, 2017
Q: Hallo I5, is there a tax advantage between dfn, df and zwu, would you please rate or rank them from safety point of view. Perhaps suggesting a couple better ones. I do not have any India holding. Would you consider either of the above safe with reasonable MER, perhaps a suggesting a couple better ones. Many thanks, J.A.P. Burlington
Read Answer Asked by Joseph on May 08, 2017
Q: Hi, I own Cdz and was looking at its long term result compared to the benchmark. It looks like they are below the benchmark every year by a small %.
Since inception the benchmark was 7.8 and Cdz was 7 % approx. is this about right and why do they fall short every year? I must be missing something.
Read Answer Asked by Brad on April 24, 2017
Q: Hi 5i team,
Your choice between XEI or CDZ as core in a RRIF with minimum yearly withdrawal and why. What % do you recommend as core holding? 15%, 20%, 25%
What about owing both and if so, what would be the % split? Thanks
Read Answer Asked by Karl on April 06, 2017
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