Q: I currently have equal weights in ZAG and VFV (about 6% each) and a fair chunk of "cash" for stability. Rate drops seem to be stalled, so ZAG is going nowhere fast. OTOH VFV is flying high and might have temporarily peaked. I don't want to lose out on the eventual bond bounce, but I wonder if I should dump ZAG to get the potential VFV upside. I realize this might be crystal ball territory.
5i Research Answer:
ZAG is down 2.39% this year, with an indicated yield of 3.58%. VFV of course is tied to the S&P 500 index which is up 7.96% YTD. It is a predictive question and really comes down to an investor's proper asset allocation. Just as bonds haven't moved much 'yet', stocks won't go straight up. Shifting bonds to equities we think is fine, but only if the overall asset mix is maintained at the investor's goals. If we were to guess, we would still expect VFV to outperform, but that should not be the only question here.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VFV.