Q: I have money to invest in a registered account and do not need the funds for at least 5-10 years. I was planning to buy a GIC, but the rates for 1 to 5 year terms are only in the 3% range. Instead, I am thinking of buying ZWU with a 7% return, realizing that there is no guarantee on the ETF price, but the rate of return is significantly higher than the GIC. My understanding is that the utitilies sector is quite stable and the price of this ETF does not tend to move much.
Do you see this as a good strategy to get a higher return with relatively low risk to the erosion of my investment value, given the long time frame?
Also, what would be an acceptable price to purchase ZWU?
Do you see this as a good strategy to get a higher return with relatively low risk to the erosion of my investment value, given the long time frame?
Also, what would be an acceptable price to purchase ZWU?
5i Research Answer:
It is a yes and no answer. For an investor seeking income, we would be comfortable with ZWU....
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZWU.