Investment Q&A

Q: Hello Team ..I have US and CA$ in my income oriented RIF. I would like to buy either PID:CA ( using CA$) or VYMI ..given their depreciated value (and high US$ ).Both have great dividends but the macro is awful and holding me back which makes me think it is exactly the right time to start easing in. I would appreciate your thoughts...best regards. gary

Q: Own both ZDI and PDI to cover international divs, Was going to sell PDI as a tax-loss and put proceeds into ZDI. Do I need both ZDI and PID or does ZDI provide enough diversification? Thanks Ron

Q: I have run Portfolio Analytics and it shows that I am overweight by region in Canada (5%) and the US (10%) and underweight in International (15%). Can you suggest 3 ETFs that will increase my International exposure in a non-registered account and include some details on these ETFs (projected performance, fees, yields, etc)?

Q: What your opinion of PID at these levels? Would you add to a position here? Good dividend but a horrible looking long term 10 year chart. Thanks Ron

Q: Hi, would these two ETF's compliment each other or would they have too much overlap, thanks for your very valuable service?

Q: What are your top 10 ETF’s to hold forever?
Would you buy them on the US or Canadian markets if available. I know some of the US listed ETF’s are more liquid. Thanks

Q: Hello 5i,
How would you compare/rank these two for International exposure?
Which would be your favourite and why?
Could both be held or is the overlap too significant?
Many thanks as always!!
Cheers,
Mike

Q: Hi 5i, I started my stock market investing in March 2020 in order to get 'skin in the game'. I am a daily learner whose investing personality is that of an 'individualist'. I have determined my investing goal to be for income (mostly through dividends) and growth (for capital appreciation). I have found lately that my risk tolerance feels lower due to increasing volatility, talk of market decline/crash, increasing inflation, shortages, rising rates etc. As a result I would like to cash in the individual stocks I own that have given me good capital appreciation and replace them with ETF's and/or Index Funds. Income and growth plus diversification to my portfolio is my objective here. Since I hold more than enough physical precious metals and an emergency stash in US dollars I feel I have enough insurance/hedge against a worst case scenario happening in the economy. Please comment on these following ETF's. I am also open to other suggestions you might have as well. Please note that my entire TFSA is in my brokerage account so taxes are not an issue for me. Thanks

ZCN BMO S&P/TSX Composite Index
CIC CI First Asset Canadian Bank Income Class
ZWB BMO Covered Call Canadian Banks
RIT CI First Asset Canadian Banks
ZDV BMO Canadian Dividend
CDZ iShares Canadian Aristorcrats
XRE iShares Capped REIT
XEC Emerging Markets ETF

P.S. I assign an equal dollar amount for each investment in my portfolio. The ETF part of my portfolio are for long term holds.

Q: The above ETFs represent my current holdings for Intn’l Equity exposure and are held in my RRSP. I am able to add to my Intn’l exposure in my RRSP and would like your recommendation for a C$ ETF that might fill in any gaps that my current holdings don’t cover or alternatively I could just add to my current holdings.
I do not need to RIF for 8 more years but some dividend yield would be preferable as I do draw out my div/int earnings annually.

Q: can you your top 2-3 dividend paying ETF's currently for a 3yr time horizon? Thanks!

Q: Thank-you for your great service. The improvements to the site are excellent.

My wife and I are value/income investors, currently focussed primarily on the Canadian Market. We had started our portfolio in early 2020 - and felt that the exchange rate was prohibitive to buy US stocks. Also, with the “Covid Crash” and trying to “learn the market” (more like drinking from a fire hose) we thought it best to focus on companies we knew (Country bias). We have done very well, in a very large part to the 5i community, and have built up a diversified portfolio of 36 holdings (including 2 ETF’s); paying six figures in dividends.

We are about a year from retirement and we have started to diversify more geographically and are looking primarily at ETF’s to achieve this. While the exchange rate is much better, the US now looks expensive to us, so we are looking to focus on the developed International markets. While ETF’s are lower risk, the broad array of options makes our heads spin. If this question is too long, please feel free to edit/omit the above paragraphs.

We have a few questions around ETF’s. Please deduct as necessary. We have read all the 5i Questions and viewed the “Fact Sheets” with the ETF’s mentioned below, as homework, and would appreciate your advice.

1. I like the idea of utilizing covered call EFT’s to help offset some of the lower yields (and potentially underperformance during a market turndown) in some of our growthier positions. For example we have a 1.5% position in LIFE (Evolve Global Healthcare CC Hedged), to help balance out SIS’s lower dividend. What percentage of a portfolio should be covered calls before it starts adversely impacting portfolio returns?

2. We also hold a 2.25% position in ZWE (BMO Europe High Dividend CC Hedged) and are looking to add either a 2.25% in PID (Purpose International Dividend) or ZDI (BMO International Dividend) which offer a decent dividend, and potentially more growth. PID currently pays a higher dividend, and we like that no one company has no more than a 2% weighting. Which of the two would you recommend, or are there other ETF’s you would suggest?

We have considered the impact to our sector weights with the above (as best we can) and will be upgrading to Portfolio Analytics to better allocate these. As we move to increase our weightings in ETF’s this will be extremely helpful.

Thank-you!

Q: Good morning,

I am considering increasing my international exposure as per portfolio analytics and am stumped between ZDI and PID. Both hold a lot of the same investments. In fact 31 of the ZDI stocks are the same as PID holdings are the same, although not in equal proportion (roughly 44% ZDI to 34% PID - mostly due to fact that the PID strategy is close to equal weight investments). My current positions in both funds are 5% and 3.75%. I am looking at increasing either or combining. I also have a 4.75 % position in QEF which I feel is sufficient since I am not yet convinces ESG is the way to go.

Can I have your thoughts on PID vs ZDI ? Thank you for your valuable input.

Q: Greetings once again and my continued thanks for your steady hand. Can you please suggest an array of balanced fund or high grade dividend fund etfs which can give me exposure to Canada, USA and the rest of the world, in roughly equal portions. KIndest regards, Al

Q: Hi 5i Team. Question relates to trading volume on PID. I'm trying to establish a 2 - 4% position in PID for international exposure for both growth and dividends. The 2 - 4% position equates to 5,000 - 10,000 shares. I tried to place an order yesterday for 5,000 shares and only half the position was taken. If I look back at the past 30 days, average trading volume is typically ~<10,000 shares. The one exception was mid December when trading volume was ~75 - 100,000 shares. Should one be worried or concerned about this when trying to establish a position in an ETF with a AUM of ~$140M. Many thanks. Steve

Q: My International exposure has been identified as deficient. After reading the Q&A the above ETF's have been identified. My question is would the above as a50/50 split provide good international diversification or would adding another ETF help. If another is needed what would be your choice, and how would you divide the positions eg. 1/3's
Thank you,
Mike

Q: Need more foreign exposure ex-Canada and ex-USA. I already own VEE and ZDI, should I just add to these or does 5i have additional suggestions? Looking to cover all bases here. Thanks Ron

Q: Hello 5i,
As always, a huge thank you for all you do!!!
Income-focused investor.
My question is in response to a previous question, in which answer to, you seemed to favour PID over ZDI. I hold ZDI and have previously discounted PID as an option for two specific reasons: 1) ZDI is almost 3x larger in market cap (328 million versus 124 million (from Globeinvest)) and also the average volume is many times greater (today's volume notwithstanding - PID seems relatively illiquid). I have seen previous answers re: ETF's in general where you are less keen on what are almost micro-cap ETF's for other than the most niche of offerings. I have occasionally had concerns about ZDI's relatively small market cap as it is. The yields between these two are only about 1% with ZDI being marginally higher. So, given the foregoing, do you see the growth profile of PID so much of an advantage that you would still endorse it over ZDI? I would have no problem switching, but my previous concerns would need to be allayed somewhat before considering the move.
In general, what would be the "line" for an ETF market cap below which you would not endorse?
Your thoughts??
Many thanks - be well and stay safe!!
Cheers,
Mike

Q: Looking for some feedback on my International holdings in my RRSP. Currently have zwp; zem; and Zdi.
I am interested in PID to compliment my existing holdings. I would split my current zdi holding to make 4 equal positions.
Pid has had better performance over the last 5 yrs, covers the same geography as zdi however with different country and industry weighting’s. Pid’s MER is higher than Zdi with a lower dividend.
Is it worthwhile to split my zdi position, convert entirely to Pid or leave well enough alone.
I do not have to Rif for another 9 years

Q: Is there any merit to owning PID if you have XBAL?Having difficult time seeing if there is an overlap. Thanks

Q: Hope everyone at 5i is doing well in these times!

I have been sitting on mostly cash in my RRSP/LIRA and would like your recommendations on the best ETFs to consider for my full US and International exposure. All of these would need to be listed on the TSX as I am purchasing in CAD $. While I know you prefer non-hedged, I’d greatly appreciate if you could explain benefits/workings of hedged vs. non-hedged considering the current environment. And provide ETF recommendations for each.

I am looking to achieve a balance of diversification, reasonable MER, minimizing any withholding tax while optimizing the potential in market recovery. For US, I would like to have a technology ETF, health care ETF and a broader spectrum ETF – but also open to ideas. Also, looking for recommendations on International – one broad ETF or perhaps that and a mix of ETFs. I recognize there can be overlap (e.g. between a tech and broad sector fund), so if you can give me a sense of the degree of duplication that may be present in your recommendations. Perhaps going heavier on tech right now could be a good thing.

While I started off thinking ETF selections would be relatively simple, in reading various Q&A there seem to be many important considerations - your assistance is appreciated. Again, all of these are being purchased in RRSP/LIRA accounts with the goal of optimizing my returns over a 10 year window.