Investment Q&A

Q: Hi 5,

I seen a post earlier today regarding MFT.
This ETF looks interesting. I'm wondering what you guys would think of using MFT instead of XHY within the income portfolio? Could you please list reasons for or against this change.

Thanks

Q: To follow-up on Claire's comment, is there an reasoned/optimal % allocation to each FI ETF (i.e. evenly split)? I have: CBO 20%, CPD 12%, HFR 26%, XBB 17%, XHY 12%, LQD 13%. I consider HFR as low-risk cash-like holding.

Thank you again.

Q: Hi 5i. FI = Fixed Income

My (6) FI holdings with rough total returns (including MER & dividends) for period held (average ~ 1.5 years): CBO -1.3%, CPD +15.0%, HFR +1.7%, XBB -2.2%, XHY+5.5%, LQD -0.6%.

NOTE: LQD not selectable, so picked HYG for question above.

Question: I understand the reasoning behind having the above FI holdings in my portfolio, but holding CBO & XBB seems like a sure way to lose money. So why not move CBO & XBB holdings to HFR (and possibly also XHY) which at least returns me ~ +1.7% pretty reliably? Your opinion on my FI mix would also be appreciated.

Thank you for continued solid wise advice.

Q: why do you think XHY is holding up so nicely given recent US market volatility...thanks.

Q: Hi, I purchased this and ZHY in a few registered accounts for the yield and thinking they might be a little more immune to decline in a rising interest rate scenario. Now I'm not too sure. Should I sell or are the prices reflecting recent interest rate bumps?
Many thanks you guys do a great job!
Bob

Q: I need to add some ETF's for yield, what would be a coupe you recommend at the moment?

Q: I keep reading the traditional fixed income portion of a portfolio that has been allocated to bonds in the past, is a bad idea as a long term investment going forward. With that being said, what type of investments/products would you suggest the average investor allocate the fixed income portion of their portfolio going forward?
Thanks

Q: How do you think this type of high yield bond etf would perfom in a prolonged correction of this nature, (XHY), thanks?

Q: Can you recommend 2 or 3 bond funds in Canadian $ that would be the least volatile and offer a return for a 3 to 5 year hold? I would prefer one Canadian and one U.S. or international. This would be my sole fixed income holding. Thanx

Q: In the current interest rate environment what bond ETF would you recommend as a core bond holding in an RRSP. Time frame would be long.

Q: I am currently using 1 year term GIC's for my fixed income portion of my portfolio. I don't need income and looking to maximize my long term total return (i.e. 10 years or more) with low volatility and relatively low risk of loss compared to equities. Can you please provide me with a few alternatives? I am thinking ETF's might be the way to go but I am open to your suggestions. Thanks for your wisdom.

Q: Hello Peter and team,
I want to pick a manageable number of fixed income ETFs that will mke up 25% of my portfolio in the fixed income portion. I note that Ishares has many bond etfs, many of them designed for a rising interest rate environment, but I am not clear on the differences between the products.

What ETFs would you recommend and in what weightings?

Q: Dear 5i
I`m anticipating retiring in a little over a year so as such have a portfolio with 50% fixed income (35% clf , 35%cbo , 15% xhy and 15% cpd )
I'm thinking of following your Outcome Oriented Fixed Income portfolio and thought i would reduce clf and cbo down to 20% then add vsc and zef at 15% each .. I just feel i need a bit more diversification within the fixed portion of my portfolio.
Does this plan seem reasonable or do these changes make the fixed portion too aggressive ?
Thanks
Bill C.

Q: I have never held bonds only equities. About a month ago bought xbb and xhy, now 15% of my holdings in my portfolio. I'm down about 2.12 % in XHY and about 0.7% in XBB in a very short time. Please tell me why I'm holding these bonds. When I can typically expect them to gain or lose; What sort of insurance/protection they offer me if that is the right word.

Q: I am overweight in a bank stock and will be selling some and since I have no bonds I am wondering if okay to just buy XHY as it would be a 5% position. This is for a RRSP account and not needed for at least 5-7 years.
Thanks

Q: I am currently trying to put together a fixed income allocation for our portfolio. I am using your balanced portfolio as a model. I have a few questions regarding this, though and would appreciate your commentary and suggestions.

Looking at your portfolio I see that you have a mixture of 1. Canadian Preferred Index (CPD) 2. the Convertible Bond Index (CVD) and 3. I shares US Hy Bond (XHY).

You mention that this would be a good model portfolio for dividend investor, which I suppose I am.

But, I was struck (rightly or wrongly I don't know) by the fact that some of the bond funds that are often mentionned on your site are not included. Clf and VSC, for instance.

Would the actual portfolio do the job, or would it be wise to add these two etf's?

Second question. I would like to have a large part of my bond allocation in US dollars. Can you suggest some US equivalents for a bond portfolio? Would an emerging market bond fund such as ZEF be worth looking at? If so, would you know of an equivalent in US dollars?

I know that you concentrate on Canadian stocks, but since you also offer model portfolios which include fixed income etf's, this question might be legitimate.
thanks

Q: Hi & thank you for continued sound advise.

I'm a Balance/Growth Investor with ~ 30% Fixed Income.

- Current Fixed Income: XBB (30%), CBO (40%), CPD (15%), XHY (15%).
- Planned Fixed Income: MMF659 (70%), CPD (15%), XHY (15%).

Reasons for change:
- Tired of poor returns of CBO, XBB.
- Want more diversifies (USA, INT) fixed income securities.
- The ~ 1% MMF659 MER seems worth it based on 6.23% compound return since inception [2005-11-25].

Haven't held a Mutual Fund in 8 years, but... Yours thoughts would be welcomed here. Thank you!

Paul

Q: Hello Peter, Ryan and crew.

I am retired and rely on investment income of about 4% dividends/interest. Because I no longer wish to take the time necessary to monitor 50 stocks and 10 bonds, I have been looking for some good income funds or ETFs to replace the individual stocks and bonds that I currently own. The ones I have found have distributions that meet my needs, but do not appear to have the underlying earnings yield to justify the distribution yield, so they appear to be paying me back some of my own money every month. Can you recommend some income funds or ETFs that pay out at least 4% and actually earn what they distribute? Like 5i, I am also sensitive to fees.

I have been a 5i member since the beginning and I continue to be impressed by your knowledge and insight as well as the continuous improvements in the service.

I wish everyone at 5i all the best in the New Year.

Thanks

Q: I am looking to move some cash after a year end portfolio clean up. I am considering 25% in each of VSC and VSB, 25% in PMIF, 25% in XHY. Would you recommend different ETFs and/or % allocations?

Thanks for you dedication
Merry Christmas to all.

Q: Hello Peter and team,
What do you think about these fixed income ETFs to make up twenty percent of my portfolio?
CBO 5%
CLF 5%
XHY 5%
XEB 2.5%
VBG 2.5%
Should I also add a real return bond ETF?
Thank you.
Pamela