Investment Q&A

Q: For a long term investment, which one would you like to start a position today? Please explain the reason. Thank you!

Q: Is there an Canadian ETF that is like IWO and IJR?

Thanks

Q: Performances of these ETFs over the past 5 years seem similar. What should I be looking at in deciding which one to buy at this time? Thank you.

Q: What would be your recommendations for small cap ETF's in Canada and the US?

Q: https://www.rbadvisors.com/insights/4-for-24-year-ahead-outlook/

RB advisers recommend the following 4 themes for 2024 and as a value investor I am looking for ETF recommendations:
(1) US small caps: I am using XSU (100% IWM)
(2) US cyclicals: I found IYC but P/E is 27! Recommendation?
(3) Non-US and emerging markets: I have been using XEF and ZEM. I like XEM (100% EEM) because it posts a P/E each day.
(4) Theme 4 is "Industrials: deglobalization spurs infrastructure". No idea what ETFs to use here.
Thanks for your recommendations/comments!!!

Q: I currently hold SPDR S&P 600 S/C VAL ETF (SLYV). It is currently 2.78% of my portfolio. What is the prospect of SLYV in comparison to IJR, IJT and IWM in 2024. Would you recommend to switch to any other small cap ETF from SLYV?

Q: Hi. I have been nibbling away at both IWO and IJR and would like to bring each up to a full position (5%) in my portfolio. Given their run during the past month, do you still see them as under-valued and buyable?

thanks,

J

Q: I am looking for a US small cap ETF that is hedged to the CAD. I have been looking at XSU. Fundata in the globe and mail indicates that it follows the Dow Jones US small cap RT index but has been doing worse the this index. My questions are:
1) Do all small caps follow the Dow Jones US small cap RT index?
2) what is your impression of XSU?
3) is there another US small cap ETF that you would recommend?
thanks

Q: I know you don't believe in timing the market but after the last few years i've ended up with a fair bit of cash on sidelines, yielding around 5%.
Post pivot i'm now thinking about when/how to deploy. Assuming interest rates have peaked and we start seeing cuts in 2024 i expect cash yields to start decreasing as well.
So if you wanted to "broadly" deploy your cash reserves throughout 2024 how would you proceed? Thinking some mix of SPY, RSP, EMV (much smaller allocation) as I have retained most of my high convinction Canadian stocks.
Dollar Cost Average monthly or quarterly
Wait for next broad pullback, we know it's coming just not sure when. Can still get a nice cash yield while waiting.

Q: The magnificent 7 have had a nice run in 2023. Assuming that the market is broadening out, can you suggest around 5 to 10 US stocks and/or ETFs where money is rotating to. Medium risk stocks. Also what sectors should benefit in the next phase of the economic cycle?

Q: I manage a small TFSA (~$25K) for a young adult family member, with a long time horizon. We would like to get some exposure to small caps, which you have mentioned are likely due for a bull move. To get diversification with a purchase of only ~$5000, an ETF probably makes sense. There are several that have been mentioned in the past Q&A, so I am looking for your advice / recommendation as to which would be the best choice for a young person looking for long term growth. I am considering IJR, IWO, IWY, VBK... but feel free to add any other(s) you like.
Thanks.

Q: Hi 5i Team,

I keep hearing that purchasing bonds is currently a generational opportunity given how elevated interest rates currently are and we are likely at the peak point of the rate cycle. How would you recommend approaching having exposure to bonds in order to capitalize on the opportunity?

Are there any other sectors or areas of opportunity that are out there that you think one should get exposure to in preparation of interest rates eventually coming down?

Thanks as always,
Jon

Q: Hi:
I own IJR for usa small caps. Could you suggest an etf for mid caps?
Thanks, BEN.

Q: For some time 5i (and others) have noted that small cap valuations are low on a historic basis, and I also believe that you have commented that small caps often lead in a market turnaround? I really like a good "reversion to the mean" play, but what are the conditions for that to happen? I have to think inflation and higher interest rates are disproportionate headwinds for smaller companies vs large caps. What should one look for before buying a small cap ETF, or just forget the timing and figure you'll be happy in a few years one way or another? Thanks for your thoughts.

Q: Dear 5i team.

Can you list US and Canadian small cap ETFs that are options currently, and which you prefer given the outlook over the next few mths?

Many thanks for your help.

Q: My son, 25, recently married and working in USA, has just begun contributing to ROTH IRA matched by employer and looking for advice on on initiating investment in top 4-6 etf's to achieve long term gains with appropriate market diversification. Also, could you please suggest weightings for each considering moderate to high risk tolerance? Thanks so much. Tony

Q: If you were to build a portfolio of just ETFs, what 6-8 would you select? Maybe ignore Canada for this scenario as I have plenty of individual positions I'm quite happy with.

Q: Hi team,

I currently have IWO as a core holding. I would like to change to a more concentrated ETF holding either in small or mid cap US. With so many different factors to choose from such as large/medium/small cap, dividend/value/growth/blend, current valuations, etc... and looking at past returns over various time periods, how does one choose the best ETF to invest in going forward now? I would consider all these ETF's to be high quality and obviously no one knows what the range of future returns will be. With small/mid cap underperforming lately vs large cap, would you place your bets on that spread closing over time? I'm comfortable with volatility and have a long term time horizon (+15yrs). How would you rank these going forward for best risk adjusted returns?

Thank you!

Q: Is it true the companies in IJR small cap 600 are requred to be profitable and 45 % or the companies in the Russell 2000 are not profitable thus making IJR a safer and better investment, Is there a covered call etf similar to IJR? Thanks for your expertise.

Q: If I understand what I have been reading in your comments is that small caps in general are down but have good potential if the economy gets back on track. What would be your favourite Canadian traded ETF to capture a small-cap rebound in Canada and your favourite that trades in the US?