Q: Can you help further clarify your answer to Ian's question on high yield bonds? You mentioned you prefer an active strategy, wouldn't that translate to holding HYI in the Income Portfolio instead of the current passive XHY? Then again passive XHY has outperformed over 1,3, 5 years and since inception.
5i Research Answer:
HYI is smaller ($71.6M in AUM) and has a slightly higher MER of 0.71% vs. XHY at 0.56%. While we like the adaptability and dynamism of active strategy bond ETFs, for the purpose of the income model portfolio, we like knowing the holdings and stability of the XHY ETF. For a more growth or tactical approach, we might prefer an active strategy, but we prefer the passive approach of XHY for its unique purpose within the income model portfolio.