Investment Q&A

Q: In your opinion which one would offer the best return over the next 5 years?

Q: What would be your number 1 American green energy ETF, Can you also give me 1 green energy Canadian company you would buy now
Thanks for the help

Q: Hi. I owm both of these at the moment in an RRSP since the split a few months ago. If I was to only own one which one makes most sense and why? Thank you.

Q: It seems the Liberals are going to heave a whole lot of money at likely renewable energy and infrastructure in the coming months. Does 5i have some suggestions where some of its subscribers would place some investment funds?

Q: Hello 5i Team
Publish as needed or as a start to a blog entry.
I performed a simplified after tax analysis of BEP.UN vs BEPC and BIP.UN vs BIPC.
Basis of Calculation
I used the 2019 distribution and related tax information from Brookfield website for BEP.UN and BIP.UN in Canadian dollars. I used the highest marginal tax bracket for Alberta for taxation rates.
BEP.UN / BIP.UN receive T-5013 tax form
BEPC / BIPC receive T-5 tax form
Results
BEP.UN you will receive 71.4% of income after tax if you assume ROC taxed each year (taxation of ROC is deferred until you sell the units and results in capital gains tax).
BIP.UN you will receive 82.1 % of income after tax if you defer ROC tax each year.
BEPC you will receive 68.3 % of income after tax.
BIP.UN you will receive 60.2 % of income after tax if you assume ROC taxed each year (taxation of ROC is deferred until you sell the units and results in capital gains tax).
BIP.UN you will receive 67.7 % of income after tax if you defer ROC tax each year.
BIPC you will receive 68.3 % of income after tax.
Going forward, BEP.UN will probably receive more foreign income (as a result of the Terraform merger) and will pay a higher overall tax rate.
BEP.UN and BIP.UN allow deferral of income tax due to Return of Capital, however this complicates an individual’s tax return when held in a taxable account.
It is difficult to truly estimate the taxes payable on BEP.UN / BIP.UN as the allocation to various tax components is not known until March of the following year. If ROC drops significantly (from 30 – 40 % of total income), the overall tax paid will increase. With BEPC/BIPC the tax percentage is known as BEPC/BIPC issue “eligible dividends” and no ROC is assumed.
All things being equal, I think it is best to hold BEP.UN / BIP.UN in a RRSP / TFSA where the slightly higher distribution yield, if re-invested in units, will result in a higher total return. In a taxable account it is probably best to hold BEPC / BIPC to avoid the headaches of tracking Return of Capital and the inclusion of a T-5013 form in an individual’s income tax form.
Each person’s results will vary as a result of province residence and marginal tax rates (13 province/territories x 5 tax brackets = 65 potential different tax rates).
Thanks

Q: Hi,
At this point in time would it be advisable to sell my BEP.UN shares and add to my BEPC shares? Or is it too late?
Thanks

Q: Hi Peter and 5i team,

I currently have BIPC and BEPC shares in my TFSA account, and I expect to hold them for the long term. Is it worth paying a transfer fee to move those shares to my CAD non-registered account in order to be able to recover any US taxes paid on dividends.

Many thanks for your opinion on this matter.

Q: Good morning, Portfolio Analytics suggests we (as elderly seniors) lower our Utility holdings by 6.32%. Currently, we have:
AQN 3.9 %, BEPC 3.5%, BIP.UN 4.6%, H 2.2%, SPB 1.8%. Firstly is there a holding I could eliminate? If not should I just lower the larger percentages? All are in RRIFs.
Second suggestion from Analytics is to lower telecom by 3.54%. Currently have BCE 4.2%, T 3.5% and GOOG 4.2%. T and BCE are in RRIFs. GOOG is in an unregistered account. I have always looked at GOOG as technology sector. Any comments. Thanks for your expertise.
Ted

Q: Would you please mention other renewable energy corp. in US and Canada. Thanks for your incredible service. Jim

Q: TD Waterhouse has BIP as a buy. It uses two valuation metrics. EV/EBITDA and P/FFO. Which is better in your opinion. Why don’t they use P/E. Final question, is there another company I could use to compare against?
Thanks.

Q: The price gap between the two seems to vary from 2.50 to 3.50 in favour of BEPC.
Do you see that as a constant going forward as both move in lockstep or do you see any circumstances that would expand or contract the differential?
Thanks,

Terry

Q: I own some of the above renewable/green oriented stocks, can you suggest a few more?
Thanks!

Q: Further to the active discussion of BEPC versus BEP.UN, I switched over to BEPC (from BEP.UN) in my registered account. I phoned TD-Waterhouse today to see if I could enroll my BEPC shares into a synthetic DRIP, and was told that BEP.UN is eligible, whereas BEPC is not. I am curious-- can you confirm this, and if this is indeed the case, why might that be? For those 5i subscribers who are interested in enrolling in a (brokerage) DRIP, this could be a relative advantage of BEP.UN, especially with a lower price (and higher yield) versus BEPC, one would be gradually adding to their position via a DRIP. Your thoughts on this situation?
Ted

Q: Good morning 5i,
With the European green deal and Biden's plans to attack climate change, should result in solar panel and wind power installations, and with so much money being allocated to infrastructure projects, which companies could benefit from these two investments by Governments..
Thanks you for your much appreciated help.
Carlo

Q: I have over 1000 shares of BEP:US in my RIF. I am planning to convert the shares to BEPC:CA and take some shares out next year as part of my RIF annual withdrawal. You have predicted that BEPC shares should do better than the BEP:US shares and so far you prediction seems to be correct. (Yes it is early days). I am thinking of selling the BEP:US maybe in a week or two, thinking the demand from Canadian investors will have slackened by then. Am I being foolish trying to time the market?
Thanks,
Jim

Q: Do you know if the reduction in ACB of BEP.UN will be based on the closing price on July 27, ie. $70.17, and therefore, the ACB of BEPC will be $52.6275?

Stephen

Q: Hi, I have have 152 shares of BEP.UN in my RSP. I understand I will get 1 share for every 4 I have so I would be getting 38 shares of BEPC. What would be my avg price for these new shares? Also if they are both sitting in my RSP, what should I do instead of holding both?? I know I can sell both and then buy BEPC in my margin account to get the dividend tax credit going forward or if I wanted to continue holding them in my RSP, is it best to just consolidate them into one? If so, which one? What would be the most efficient thing to do? Thanks!

Q: I hold BEP.UN in my RRSP account. Would you recommend converting all BEP.UN shares to BEPC shares or just keep both shares? Thanks

Q: Hello 5i,

Lots of volatility before and after the split. Obviously people are trying to mimic BIPC game plan and it is not playing out the same way. What do you think the current fair price for BEPC and BEP.UN should be and what do you see the price being 12 months from now?

Q: If BEPC is considered an international holding as it is Bermuda based, does the same apply to BIPC.