Investment Q&A

Q: Building up my ETF portfolio and have some cash to deploy. Of XEF VE and SPY which is the best one to add right now. Crystal ball yes...balanced follower, 5 year time horizon. I am currently over allocated to Canada and on target for emerging markets a little light USA and international. Likely to buy a bit of each if not strong case for one in particular.

Q: Have $20,000.00 sitting in a LIRA account. Please recommend 3-4 ETFs that I can hold for the next twenty years. and drip (no bonds) would like to double every 10 years. Would Dividend Growth ETFs a good choice over that time frame or just growth stock ETFs?
Thanks Cec

Q: My ETF portfolio is 30% SPY, 20% VIG, 10 IWO ( 50% USA exposure), 20 VE and 20% VEE. You seem to have switched to recommending VSP and VUN as your USA ETF. What are the advantages of VSP/VUN over SPY. VSP and SPY have similar mers, VUN is a bit higher at 0,16. I assume I started buying SPY on 5i recommendation at some point in the past... Balanced portfolio follower, nearing retirement so shifting more towards income/div aristocrats over pure growth plays.

Q: Hi Peter & Team
Love your service. I have good pension income and a balanced portfolio of Cdn & US stocks in my TFSA's and non registered accounts.
I also have $300,000 in my RRIF accounts and would like to rebalance with a few conservative stock ETF's (3-4 ..?) to achieve US & Global coverage. What do you suggest ...
Bill

Q: Hello, Sent a question earlier and your reply is as follows;

PA recommends to reduce my technology exposure which is at 38%. Only problem is I am unsure which tickers to get rid of, like them all.

In my RRSP; OTEX at 4% and XAW at 21% not a direct tech exposure but does hold plenty of tech, just not sure how much.

LIRA: SHOP at 6.5%( recently chopped it from 9% to 5%), LSPD 5%, KXS 3%, QST 2.2%,

TSFA: CUSat 5%

Which one would you pull the plug on?

Tks

Asked by Rino on August 22, 2019
5i Research Answer:

XAW is currently about 22% technology. We like all the names here, and there is nothing stopping you from selling some of each if you want to lower exposure. XAW at 21% is a large position and could also be moved to 15% or so in our view. It has not performed so well either. If you want to sell just one we would lean to QST as the smallest and riskiest.

I should have also mentioned that PA also suggest to reduce my canadian exposure which is above 60%. That is the reason why my XAW exposure is at 21%. Having said that if I were to sell roughly 6% of XAW, can you suggest another non canadian etf to invest in? Seeing that XAW covers basically everything for my international exposure.

Thanks again!

Q: I would appreciate your recommendations for the most tax-efficient ETF's for US equities in non-registered , RSP & TFSA accounts .
Thank you.

Q: Hi All at 5i! Any advantage to holding one ETF over the other. Which one do you favour? Cheers, Tamara

Q: I recently read your article "Cap-Weight vs Equal
Weighted Indices" in etf-mutual fund letter which generally concluded that equal weighted etf's out performed cap weighted etf's. However, I'm wondering if this is still true if higher MRE's and higher taxes (due to higher turnover) are taken into account. In other words what's the after tax comparison, say if you were in the 40-50% tax bracket? Do you have some idea or do you know some studies on this?

Thanks

Q: Hi 5i team,
I am wondering if you can compare VOO to SPY. Which is better to add to my portfolio? Are them similar? Are them both tax efficient in RRSP and TFSA accounts?

Thanks,
Alice Liu

Q: We have( for me) a quite large sum of money invested in managed products. Any new money is going into Canadian equities ( 30%) following your portfolios and a mix of ETF roughly
30% USA at 10% SPY, 10% VIG, 10%IWO
30% International currently VE
10% emerging currently VEE
( I know "where is your fixed income" you ask, my spouse has a federal government pension which I count as our fixed income)
To date these sums are relatively small. As I start to shift large sums from our managed products to my self managed portfolio ( following the above ratios) I am ok with the mix in the USA spread to 3 etfs run by 3 different companies. With the international and emerging I am a bit concerned about putting all that cash with one fund (and company). Is this concern silly or should I have some diversification within my ETF holdings ( both in terms of funds and companies). For example instead of having 30% of my holdings in VE I would split it 15% VE and 15% XEF. So I guess the short questions are:

1. What is the max an investor should have in any one ETF( %)
2. What is the max an investor should have with any one company ( $ or %)

Q: BUYING PROTECTION: WHEN to buy? WHAT TO BUY?
From time to time (especially today on CNBC) I am hearing Traders talk about buying protection with volatility in the US at ~16 .... vs much higher last week.
I assume this advice is also linked to the fact that US markets have just finished a “best ever” kind of bounce after last weeks debacle.

Does 5i agree with that strategy?
Would you be inclined to do this automatically when VOL drops to a specific level? If so, what level?
What ETF(s) would you suggest since playing options is not my game?
Would there be a rule of thumb as to how long to hold that “protection” in place?

Thanks for helping to educate me in this area.

Q: Greetings 5i team,

For people who invest in a US market index ETF, are there significant differences between IVV, VOO and SPY ?

Are there any other similar US market index ETFs?

Thank you.

Milan

Q: please provide mi with best options of Canadian ETFs to mirror above US ETFs :QQQ, SPY, SSO ,that I can put them into my Canadian TFSA .
Thanks for great service
Andrew

Q: I am a new retiree and interested in income, with some growth. What ETF or ETFs would you recommend for a non-registered account? Thank you.

Q: Have $20,000 I would like to allocation outside Canada. Already receiving an average of 6% dividend return on my C$ portfolio. Not really looking for additional income , what do you think of the above or is there other ETFs I should research.
I have a small position in VGG. Maybe etf holding Amazon, PayPal but not a pure internet such as FDN.

Q: A large part of my US holdings is SPY which I like for its broad market exposure and liquidity. While SPY is in my non-registered account, in my registered account I hold HDV for the higher dividend and to shield the dividend from withholding taxes. Does this strategy make sense? I ask because I am trying to reduce my total number of holdings and would like to consolidate wherever there is any overlap. Right now my annual tax rate is close to $0 and I won’t really be needing to draw any dividend income for at least another 5-10 years. Does consolidating these two into one make sense and if so which would you prefer?

Q: Just sold mutual funds and want to transition to low fees ETF's for the portion of my portfolio outside of Canada. It is for my RRSP, 15 years from retirement. I was thinking SPY / XEF and VEE for the equities side. Do you have something better to propose? I would need help for the fixed income portion, 1 or 2 ETFs please. Thanks.

Q: What do you think of XSP vs SPY? xsp is Canadian funds. spy is U.S. funds. This is for my TFSA.
Thank you

Q: We are thinking of moving our US holdings to etf's rather than individual companies. Currently we own some VOO but notice that you recommend SPY often because of its volume and liquidity, i think.

The first question is whether there is a lot of differnece between the two and whether it is worth getting SPY as well as VOO?

Secondly, we notice that the top ten holdings for both etf's contain a lot of FANG stocks. So we were wondering if we needed other etf's to balance this weighting?
Do you think a total market etf like this is enough to cover the US market?
thanks again for great advice

Q: XIC/SPI were 2 suggested ETF funds for a beginner. I'd like your opinion on XSP vs SPY because it is traded in Canadian funds vs U.S. funds. It was suggested that as a beginner I should study the market more and not plunge into U.S. dollar funds a this time. Opinion?