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: If you were going to build my bond portion (40% +/-) portion of my portfolio using ETFs, how would you build that? Is there one ETF that provides a broad mix of corporate / municipal / provincial / federal, a broad laddering of periods, a mix of risk, a mix of regions, etc? Or would you build it using multiple ETFs that specialize in specific products?

Q: I hold some TLT, at a loss.
Do you think I should add to it or or buy IEF?
This is not for a long -term hold, I just hope, if rates go down, there may be some capital gain.

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: 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: Hello 5IR,
Do you know of any fund or ETF that invests exclusively in US T-Bills?
Thanks you. cheers

Q: Would you please suggest the names of several short & long term US Treasuries ETFs. Thanks … Cal

Q: UTWO:US and UTEN:US are ETFs of US Treasury bills: UTEN of US ten-year treasury bills, UTWO of the two-year. Both ScotiaiTRADE and RBC-DI make it difficult to buy US T-bills hence my interest in bond ETFs. Would you recommend — at THIS time— an ETF that holds’ 2 year and 10-year T-bills? ETF.com describes these as single-bond passively managed ETFs. RBC-DI shows UTEN:us has a yield of approximately 4.8 % pa and about 2.1 % on UTWO TODAY. For comparison, 2.5% is the approximate yield on US Money Market funds.

Is it worth buying either one or both of the above-noted bond ETFs? I am sure you have better ideas than the above ETFs, so would appreciate your suggestions of instruments that are better than the ones I have noted above.

Q: For investors seeking to capitalize directly on what looks to be an impending rate hike bonanza through the end of this year (and possibly into 2023), what options are there to look at?

TTT (US) seems like the only decent option but it only offers exposure to longer term rates (20y) which could take a while to respond to higher rates on the short end. Any options you can provide me to investigate are greatly appreciated. Thanks.

Q: Hello 5i Team

In a taxable non-registered account denominated in US$ I hold Berkshire Hathaway (BRK-B) as a proxy for the US market in which no dividends are paid.

I would like to complement 20 % of the account value in US government bonds as a hedge against market corrections.

This account has a time horizon of greater than five years before any funds are withdrawn.

Which ETF (I used iShares as the ETF provider) would be most suitable for this account:

3-7 Year Treasury Bonds (IEI) duration = 4.66 years
7-10 Year Treasury Bonds (IEF) duration = 8.01 years
10-20 Year Treasury Bonds (TLH) duration = 14.89 years
20 Year Treasury Bonds (TLT) duration = 19 years

Or should I use a general US Treasury Bond ETF (GOVT) with a duration of 6.79 years.

If the same question is asked and US Government TIPS are utilized in place of US Government regular bonds which of the ETF below would be suitable:

0-5 Year TIPS (STIP) duration = 2.60 years
General TIPS ETF (TIP) duration =7.68 years

Thank you

Q: How can one play the US10Y which had risen 24% in one month?

Q: Goodmorning 5i,
You recently recommended shv for a reader seeking to place short term money. I have owned tlt and have found it a bit volatile for my safe money. Although, if this is not too contradictory, i plan to buy it back after the virus scare finishes. But, i was wondering whether in the US, whether you might suggest something between these two, that is, something with a higher return than shv but not as volatile as tlt?
Thanks

Q: Since the tax benefits for HXT, HXQ, HTB, HXS have or will be diminished, is there any reason to continue to hold them or should we be switching to other etf's, is so which ones would you recommend?
Thanks for your service.

Q: hello 5i:
my question pertains to US medium term bond etfs. Do you have a preferance between IEF and VGIT, and if so, why?
thanks
Paul L

Q: IEF 7-10 year Treasury Bond ETF

Your thoughts on IEF as part ( 2% ) of a fixed income portfolio.