Investment Q&A

Q: Hello 5i,
We have CDN and US funds in our RRSP’s and TFSA’s, no pensions, income is CPP and OAS only, + RRSP withdraws.

We are looking at placing funds needed for the next 3 years into less volatile environment with a yield of 4%-5%. We have laddered GIC's and PSA for CDN funds and are looking for something similar in US funds. Our equities (stocks and ETF's) would remain in place though each year we would sell some stocks and purchase short-term ETF’s to retain a 3-year comfort zone. This allows us to retain higher risk equities in a longer time-frame in case of a large drawback.

Some examples we found were IGSB, BIL, VGLT, VCIT, VCSH, AGG, IEF. Do you have any recommendations? What are your thoughts on long-term Treasuries with a Trump win? Dump and run?

Thank you for your service.

D&J

Q: In many of the investment articles I have been reading Bonds are being touted as a good investment in 2024. Do you agree? If yes, what Bond ETF's would you recommend?

Q: Hello 5i,

Our portfolios initiated positions of TLT, VCLT, IEF, VCIT, and VAB ~2 months ago. TLT and VCLT are each at 2% of the portfolio. VAB, IEF, VCIT combined are 3%.

We will add additional funding to the ETF's. Would you recommend an increase across the board or should we focus our increase on TLT, VCLT, and VAB based on the latest talk about lowering rates?

Note: We are treating the ETF's as a stock as we have GIC's through to 2028 as our fixed income (15%). What are the triggers to indicate that the ETF's are reaching the end of the runway and a switch to individual stocks is recommended?

Thank you for your great service and Merry Christmas.

D&J

Q: Hello 5i,

Is there a downside (15% tax) of owning US bonds such as VCIT, VCLT, TLT, AGG, in an RRSP. If so, can we apply for an exemption for an RRSP? If not, would you switch to XTLH instead of TLT? Are there can-hedged ETF's for VCIT, VCLT, AGG?

Thank you

Debbie and Jerry

Q: Good morning 5i
I am getting older and not sure i want to endure too many more stock market roller coaster rides. I am therefore thinking of moving into a higher bond allocation. You have mentioned yourself that even something like tlt could be a roller coaster. I am not adverse to getting some but I would like to know from you, what bond etfs you would recommend if one wanted , for instance, a 40/60 split between bonds and stocks. I am open to Canadian, too, but my intention is to keep fixed income in our rif, therefore, i would concentrate more on us bond etfs
Thanks as always

Q: I am looking for $US-denominated ETFs to hold within my RRSP/RRIF. I would be interested in both shorter and longer-term names. When I review the questions you have answered and the company's literature, it is not clear if the bonds pay US dollars or are simply US bonds bought in Canadian dollars.

I am assuming that any ETFs that fit my criteria would not result in US taxes being paid as long as they are held directly in my registered accounts. If this is not the case, please suggest ways to ensure no taxes are withheld at source.

Appreciate your insight.

Paul F.

Q: I am an income investor in my 80’s, largely in large cap Canadian equities and with 30 percent in GIC’s. Approximately 5% in U.S. stocks through ETF’s. I feel that I should have a larger U.S. presence but lack the knowledge to invest in that market. Can you make a few suggestions, bearing in mind that preservation of capital is important?

Q: Hi there, with all the buzz about fixed income, Gics, bonds etc. I feel like maybe I should be increasing my exposure in my RRSP. I am retired and definitely have a diversified portfolio more slanted toward div paying solid equity companies.

I know you can’t give personal advice but what might be a good way to tweak my portfolio to increase fixed income exposure for 5-10 years ie gic or bond ladder, ETFs, individual bonds or?

Or should I stay in dividends and forget about it?

Ok thank you!

Q: Hello 5i, common question for you but I have very little bond exposure and was looking to start building a fixed income portfolio. Can you give me your current top 5 bond picks (assuming ETF's). This can be USA or Canada bonds.

Q: Hello there

I'm looking for a US bond fund (USD is fine) for a registered account. I'm fine with high quality corporate bond funds or gov't whichever you consider optimal. Which do you suggest are worth considering? thanks al

Q: I noticed in your disclosure you have an interest in TLT, I hold ZTL which I assume is comparable?

Horizons Seasonal Rotation ETF as of May 31, 2023 has 75% in 0-3 month T-bills & 6% in 7-10 years with no exposure beyond that.

Could you help me understand the risk/reward difference between the ultra-short term and ultra-long term T-bills and which I would be better with in todays market and assumption interest rates may have peaked, or should I cover both ends?

Q: The last line in the recent article on bonds that you sent members reads, “In our minds, the better place to be within fixed income is higher-quality, shorter-dated fixed income, where you’re not taking on as much risk.” Assuming you concur with this statement, what investments do you recommend that align with "higher-quality, shorter-dated fixed income"?

Q: Context: Sold CNQ after a long run up. Funds now to deploy into a locked in RSP about to be unlocked into an income stream. Currently have all blue chip dividend payers and am looking to offset risk by initiating a bond position. Looking for:
-CDN domiciled etf with NA and/or Global focus
-3% minimum yield
-High grade but willing to accept corporates for yield
-Prefer shorter term to maturity, to match future rate increases
-If not CDN domiciled, willing to look at US and willing to look at more than one to match criteria

Thank you!

Q: Hello 5i team,
My portfolios are mostly stocks and with a possible recession coming next year, I would like to purchase bond ETFs for both my CDN and U.S. portfolios. At this point would you recommend long or short or ultra short ETFs? and could you suggest a couple of each ( CDN and U.S)? Thanks Carlo

Q: Im looking at the Dalio/Robbins "All-weather Portfolio". Do you have any comments about it fundamentally? They both say its about diversifying the risk rather than the sector or products in order to increase the chances of making money in almost any market and decrease losses.

Can you make recommendations for each category please? They also recommend low cost etfs to get further diversification within each category. I would still keep a small amount of cash aside for higher growth names to "play with", so any profit taking would potentially go into the All Weather Account.

What they lay out is:

30% Long term bond (20-25 year)

15% Intermediate Bonds (7-10 years)

30% Stocks

7.5% Gold (possibly a bouillon etf, or possibly just gold with no etf)

7.5% Commodities


Please deduct what you feel for credits since this is a multi part question.
Thanks

Q: Curious why you picked a medium term (5-10 year) US bond etf to recomend to me in the last question i asked. do you think this is preferable to short or long?

you also recommended GOVT. Were you thinking I should put half in each?

Q: Do you think its time to sell VCIT and buy iwo and xlf or other financial etf. Thanks