Investment Q&A

Q: For my retirement, I have income coming from several streams. Rental income from property, employment income from an eight-week/year position (that I enjoy immensely), and a small RRSP account that I plan to use to earn 8% per year average and take principal and interest for monthly payments, using it up completely over 9 years, pushing off OAS and CPP until I’m 70 years old, when these benefits have maxed in value and can replace the depleted RRSP funds. Recently, I have been researching high income, 25% leveraged ETFs (I asked a question about them a few days ago, but this question takes the concept a step further), and I had the thought that it might be possible to buy a few ETFs for the RRSP, replacing all equities, and earn an average yield of 13%, which would cover the monthly payments while not depleting capital. I realized the capital may be reduced at the end of the 9 years, but likely not gone as in the original scenario, so any leftover funds would be a bonus. This would also free up time from managing my portfolio the way I do now, giving me more time to enjoy my retirement. Do you see any big holes in my theory? I wondered, for example how variable the dividends can be year over year. If this seems like a solid plan, could you suggest a portfolio of ETF’s (would 5-6 suffice?) that would serve this concept? (Note-I do have other investments, but they are not part of my monthly income streams, more a rainy-day fund.) Thanks!

Q: For a new portfolio would you favour a Canadian bank ETF or investment in individual bank stocks

Q: In your opinion, pls. recommend the best covered call, Cdn. bank ETF.

Thank You

Q: I currently have HCAL in a growth orientated TFSA and I don't think this is a good fit.
Currently, I hold Goog, SHOP, LMN & CLS. Do have a few ideas for a stock that could replace the HCAL ETF?

Q: I have been invested into the two ETF’s: HCAL and HUTS. I understand that this is a leverage play i.e. 25%. What I do not understand is why are the monthly distributions so high? I did the math on both ETF’s added all the yields up added 25% and it should not be yielding at current percentage. This is not a covered call ETF. Is there return on capital? What am I missing here?

Q: I have incorporated these ETF’s into my RRIF with the goal of deferring taking capital from my principal ( mandatory and rising % withdrawal requirements ). They now represent 33% of total portfolio. My TFSA and cash accounts equal my
RRIF and are more growth oriented. The ETF’s give me a high yield, diversified portfolio of solid large cap, primarily low growth companies in Canada and the US. So I ask myself “ Why don’t I have my RRIF be 100% of these 5 ETF’s ? What say you ?

Thanks Derek.

Q: From what I understand from 5i - HCAL should move up much faster than HMAX and ZWU should move up faster than UMAX when the market begins its recovery. Is this a correct analogy? Thx James

Q: On April 23 HCAL will switch from a mean revision model to an equal weight model.
Will this reset the price and how significant would it be ? Thanks. Derek.

Q: I am looking at reconfiguring my newly established RRIF into the above equities with the 3 etf’s being 25% each with the remaining 5 stocks being the remaining 25%. What is your opinion of these stocks and portfolio composition? Am I being too cute ? Thanks. Derek.

Q: Growth investor, high risk tolerance, who enjoys dividends as well. Im currently sitting close to 21% in Financial Services, a combination of long held holdings with big gains; GSY, SLF, newer purchases down slightly; ZEB, HCAl, and the newest and worst performer ECN. Stock positions are close to 5% each, I add or trim accordingly, ETF's are smaller. I wrestle with knowing holding good companies long term is the way to outperform, against opportunity costs of holding underperformers and or overweighting the wrong sectors for the year. If you managed your own $, what % would you hold here, if trimming, what order ? Emotionally it's much easier to trim GSY with big gains than ECN at a loss, but then there is the trimming the winner and holding the looser thing?

Q: Your thoughts on swapping HCAL for ENB.

Thanks

Q: Is there some way to score-board enhanced-yield Canadian bank ETFs/funds that assigns more weight to the factors that make more of a difference? Yes, fees add up, but even over the long term it's hard to see how basis-point fee differences could outweigh percentage-point yield differences. And won't either of these factors be outweighed by distribution tax treatment and, especially, by central bank rate-pivoting?

Further, in side-by-side comparisons, 5i often prefers larger ETFs (recently, for example, when comparing CBNK vs BANK.) But given large-cap banks' similar value-propositions and tendency toward mean-reversion, why should higher AUM matter (other than w/rt second-order effects like trading liquidity)? Put another way: what, if anything, could a new entrant to this sector do to make themselves attractive to 5i?

Please add to the supplied symbol list if other names provide more instructive comparisons.

Q: Do you think these ETF's are worthwhile investments in the Cdn. Bank area?
They both have high yields - are they sustainable
What is difference between the two? Which one is the preferred investment?
If neither are preferred - can you suggest an alternative?
Thanks

Q: I have the above ETF,s in my TFSA in roughly equal weights along with a number of stocks. Is there sugnifcat any over lap here? Where would add first or all equaly? I know your not a fan of covered call ETSs. Any suggested changes or additions?

Q: The financials segment of my RRIF consists of BMO, BNS, RY with a 25 % total portfolio weighting.
I am looking at selling the 3 and replacing them with HCAL. Believing in the long term growth and security of the Canadian banks , I see this move as providing both higher stock price movement with its 1.25 leverage and higher dividend yield. I see the disadvantages being a nearly 1.00 % MER and greater lose potential in a falling market.
Am I missing any other advantages/ disadvantages ? Would you recommend replacing bank stocks with this ETF and why ?
Thanks
Derek

Q: I am looking at one of these three to add to my TFSA for better than average returns for when the market returns to better times over the next two years.
Please discuss the strengths/ weaknesses of each and list in order your preference. Thanks.
Derek

Q: I am having trouble accessing the distribution specifics ( cash, return of capital etc ) of this ETF for 2022 and ytd 2023.
While it has a high yield , I am interested in the yield on $ actually distributed.
Any information you can provide will be appreciated.
Derek

Q: Hello!

Which ETF should one purchase for capital appreciation, HCAL or HFIN.

Thanks a lot!

Q: Let's assume that I am convinced that canadian banks will remain an oligopoly over the next 20 years and provide me with 10% CAGR.

Should I buy a basket of canadian bank stocks, or should I place my bet on HCAL or CBNK to obtain leverage ?

Thank you !

Q: Structurally what is the difference between CBNK and HCAL ? One yields 6.95% and the other 8.84% ..... If they are more or less the same product I can't see any reason not to opt for the higher yield .....