Investment Q&A

Q: If a person was looking for income only with a lesser amount of capital gains what are your thoughts on these candidates for 20 % of an overall portfolio ?

Q: If these two exchange-traded funds (ZDV and ZWC) have essentially the same holdings, but ZWC is a covered call, then can you please explain the difference in the dividend? ZDV has an annual dividend of 4%, while ZWC has an annual dividend of 7%. Can you also explain how the covered call feature works? Thank you.

Q: I currently have all 4 of these etf's in my tfsa. Would you think that some of these etf's are holding the same companies, if so which one would you suggest i keep and which ones would you say i sell. And if there any other ones would you suggest i replace them with. THANKS GUYS

Q: As an older senior, I own CDZ for dividends. Would ZWC be a better option?
thanks

Q: I was looking at this ETF for income purposes only. It is up 11% for the year so far. Can you please comment on the appropriateness of using this ETF for income only purposes?

Thanks

Q: Good morning, i know you are not real keen on income producing funds that sell options to enhance income but if you were buying a few, which ones would you recommend in today's market, thanks?

Q: What are the risks associated with investing in ZPAY? Also are there any similar funds with the same risks and rewards?
Thanks Mike

Q: Looking to establish a portfolio of higher yield equities. What are your thoughts on the above ETFs as part of the portfolio and which would be a preference if choosing only one? Have just started building recently with 1/2 positions in each of POW, PPL and BCE so far. Expect to hold 7-10 positions in total.
Thanks

Q: Retired, dividend-income investor. A question earlier today has motivated me to finally ask this question....been thinking of it for quite a while. It had to do with potential rising interest rates and your response was that dividend investors should be prepared for a bumpy ride in the short term (my paraphrase of your answer).

I own the above securities and for the most part trim-add around core positions that I hold for the long term. Is it possible to divide the above securities into two camps....one that would be "ok" in a rising interest rate environment and the other that I should consider trimming a bit or maybe selling? I am ok riding things out for the long term and do not normally react to short term volatility.

Thanks for your help....Steve

Q: I would like to reduce the number of stocks I hold and one area that might be easiest to tackle first is financials. I hold ZEB, ZWC, BNS, and a lot of MFC.
I was considering selling all the above (except keeping a good portion of MFC) and putting the proceeds into FIE because of its seemingly good blend of dividend and growth..
But I need a sounding board - ZWC is the only under-performer in the group from my perspective.

Q: Hello 5i team, curious to know your thoughts about covered call ETFs, and whether they provide any interesting opportunities for portfolio diversification/hedging. If yes, would appreciate any suggested ETFs for Canadian, US and more international exposure. Thank you!

Q: If I buy:
ZWC ((BMO CDN HIGH DIV COV ETF) for Canadian exposure and income,
ZWS (BMO US HIGH DIV COVER ETF) for US exposure and income, and
ZWE (BMO EUROPE HI DIV COVER CALL HEDGED CAD) for European exposure and income,

that will give me about 7%+ income and exposure to about 120 very decent world wide companies. As a retiree, would I need to do anything else?

Q: Are utility stocks and other dividend names under greater pressure with a rising 10 yr yield? If so, could you please explain why? Thanks.

Q: Hi All: I will be Transferring 'in kind' from my open account into TFSA. In your opinions which of this list might have the better growth potential, therefore capital gain protected within the TFSA? Too Bad for the $6K limit. Would you assist me in prioritizing my list?
Thank you for the great reading (Questions and Answers) and wonderful Web site. Happy New Year to all your great staff and all the happy 5iResearch Clients!.

Q: Thanks for the quick answer. Just a follow up to my "renewables" question. My 3rd question was meant to compare ZUT versus the covered call equivalent ZWU (not ZWC, which I also own). Rereading your answer a few times makes me believe that you thought the intended comparison was between ZUT vs ZWC...not so.

It appears to me that the total return for ZUT handily beats that of ZWU. My question related to where we are in the market cycle. My understanding is the covered call overlay system works best in a slightly rising, flat or slightly falling market...I think. Otherwise the CC ETF will underperform in a bull market. So, based on where you believe we are in the market cycle, which ETF is best...ZUT or ZWU. This ETF is intended to improve my asset allocation by increasing my Utilities and Energy exposure. Again, I already own ZWC. Based on where I think we are, I am leaning towards ZUT for total return. Your thoughts?

Thanks for the clarification...Steve

Q: Retired dividend-income investor. Your answer today about an ETF with a focus on renewables hit all of my markers. I've been struggling how to address the renewables latest trend and your answer solves my dilemma (already own AQN, FTS, TRP).

Q#1 = So, if XUT has roughly 45% renewables, what % renewables does ZUT have?

Also, it appears that ZUT outperforms XUT over multiple time periods and has a slightly larger dividend. ZUT is also equal weighted while XUT is not.

Q#2 = Which would you choose, XUT vs ZUT and why? I'm leaning towards ZUT.

Q#3 = Now, throw in where we are in the market cycle. Assume you chose ZUT in question #2, what would you think of ZWU? ZWU has a covered call overlay that helps to deliver a 7.9% dividend vs ZUT of 3.5%. I know you are not keen on CC ETF's in an expanding market as they limit the upside.

Thanks for your guidance...much appreciated...Steve

Q: Good day and thank you for all your valuable information. In looking to consolidate some income positions in my portfolio I would like to bring one of these two high income earners toward a fuller position of 4-5% in my portfolio (currently ZWC at 1.1% and MFT at 1.98%). Portfolio is aimed at getting 80-20 split equity-fixed income. Can I have your thoughts on these two and any suggestion toward any other I should be considering instead. Thank you.

Q: For a balanced portfolio with the next 3-5 years in mind, what are your suggested weightings in preferreds, utilities and high yield bonds. Given low interest rates preferreds in particular seem like a place investors will go to seek higher yields with some opportunity for growth.

Q: Hello!

I am currently invested in three of these ETF's. Can you recommend other high dividend paying ETF's to complement my current allocation. Thank you!

Q: Hi 5i
"Rock Bottom" and "staying lower for longer" are the phrases being assigned to interest rates.
I hold pref shares (min rate reset) that seem to be benefiting from income seeker buying.
I also hold Canadian dividend paying stocks that have not recovered due to fears of more dividend cuts and poor economic performance ahead. (ET, FSZ, BCE, BNS, PPL, IPL, ENB.......)

With increasing emphasis now being put on very low rates, are there advantageous investments today for income with growth as investors realize they need more income and gravitate to income producers? (and high interest accounts continue to pay less and less interest)

Does a diversified Canadian ETF like ZWC (Covered Call Canadian) or ZWH (Covered Call US) make sense going forward?

Thanks
Dave