Investment Q&A

Q: When I assumed control of my RRSP from the broker , I found OCV-UN in overly large amounts. Broker piled in at IPO price of $12. (Broker was dealer-advisor). I left the holding as was for the wrong reason, namely : OCV.UN has dropped significantly from cost such that monthly distribution is now around 9 to 10% p.a. I am uncomfortable with O’Leary. Are you able to suggest one or more ETFs that could take the place of OCV.UN? In the alternate, if you feel it’s OK to leave it alone for now, I would be thankful for knowing that.
Thank you and all the best
Adam

Q: Canadian Banc Corp is an Investment Corporation
that invests in a diversified portfolio consisting of six
Canadian Banks. Two types of shares are available, a
Class A (BK) and a Preferred (BK.PR.A).

I have had class A shares for a few years and am very pleased. It seems to good great dividend and capital gains . I see the very low liquidity as a big problem. I believe you are not supportive of the structure and the fund.
Would you reduce as it is 6% of holding with no other bank exposure? what other red flags would you look out for.
thanks
Yossi

Q: I thought this article by Rob Carrick (Oct 23rd) would be of interest to your Members.
Any comments on it from 5i would be welcome as CBO is often recommended on the site as providing a 4% + return.

Thanks in advance:

"You're probably not getting the yield on bond ETFs you think you are"
Oct 23, 2014 by Rob Carrick


"Some of the most stubborn investors out there are the ones who believe they’re getting yields of as much as 4 per cent on their mainstream bond ETFs."

"Consider the popular five-year laddered corporate and government bond funds offered in BlackRock Canada’s iShares family of exchange-traded funds (CBO and CLF). If you find quotes for them on Globeinvestor.com, you’ll see yield of 4.2 per cent for the corporate bond ETF and 3.6 per cent for the government bond ETF. For comparison’s sake, a Government of Canada five-year bond yields about 1.4 per cent a 10-year Canada bond gets you just short of 2 per cent."

"I am continually surprised by the number of investors who don’t question these bond ETF yields further. They insist on believing they are getting double the yields available on government bonds. Think about it, people. If bond ETFs offered such outsized yields, wouldn’t investors have piled into them and driven the yields down? As prices rise for bonds and bond ETFs, yields fall."

"If you’re in the group that takes the published yields for bond ETFs at face value, let me direct your attention to the yield to maturity numbers displayed on the fund profiles for CBO and CLF on the BlackRock website. CBO clocks in at 2 per cent, or 1.7 per cent after fees. CLF comes in at 1.4 per cent, or 1.2 per cent after fees."

"The yields you see in bond ETF quotes is the distribution yield, which is based on the previous 12 months’ worth of interest payments and the current share price for the bond ETF. If the price of a bond ETF stayed put, then distribution yield might mean something. In fact, the price of CBO and CLF units have been falling in recent years. Globeinvestor.com shows a three-year cumulative drop of 3.6 per cent for CBO and almost 5 per cent for CLF. A lot of the bonds held in these ETFs have been trading at prices that are above their value at redemption. As these bonds approach maturity, they decline in price."

"If you want to know what yield you’ll get from a bond ETF on a total return basis – that’s interest paid out combined with changes in the unit price – then check yield to maturity. The distribution yield is a much happier number, but it’s not the whole picture."

Q: Your thoughts on PDV and GII.UN. They both pay a good dividend.

Q: Hi 5i Team;

I'm thinking of buying this because it has a high yield (6.86%). Would you recommend buying it or is there a better buy with this yield?

Thanks
Larry

Q: This fund pays out a dividend of 9.3 cents per month - 9.47% at today's share price. It has what seems to be a low beta of 0.22. ( Is that relevant for this tuype of stock?)
How would you rate this stock as a reliable component of the fixed income portion of my US dollar portfolio?

Thank you.

Q: Hi 5i Team.
One of the few remaining Mut. funds left from our "big broker" days is Mackenzie Sentinel Corp. Bond fund MFC756/856. We hold it in both our joint taxable a/c, and in our RSP's. It is a substantial holding at ~ 8.5% of our consolidated. We have done fairly well todate, but over the last month it has been on a steady decline (-1.7%).
With a MER of 1.75, we are contemplating taking our profits before further declines, and investing the proceeds in something like exch. traded fund CLF or perhaps splitting between it and a floating rate ETF.
Can you give us your opinion. Thanks

Q: Dear Gentlemen,
I want to increase my Income PF.
Your opinion on Aston Hill VIP Income VIP.un
Any better suggestion for high income.
Thanks
Best Regards

Q: Peter and Team,
Could you please give me your opinion/assessment of AEU.UN. Many thanks,
Nancy

Q: Would like your opinion on vet verses rbn.un for appreciation and div income. Thanks.

Q: What can you tell me about TDb Split Corp (symbol XTD on the TSE). How does the stock generate its income?

Q: Hello 5i,
I have a diversified portfolio with over 60 companies and am thinking of buying Brookfield Global Infrastructure Securities Income Fund (BGI.UN). What do you think, there's not much information on the fund?
Thanks,

Q: Brookfield Global Infrastructure Securities Income Fund (BGI.UN)I am trying to look into this and am having trouble finding much on it. It has hit new highs the past 2 days and has a 5+ dividend. You haven't commented on it since just after its IPO just over a year ago. What does it do; why is it hot now.
Bryon in Elmira

Q: Please give me opinion on ffi.un or a etf with a little more capital gains, thank you. Jack

Q: Hi
Please give your comments on TLF.un.
What do you think of it as an investment for income and growth in a taxable account. Are you still unhappy with the fees?
Are the fees subtracted before the yield is shown? (6.4percent in globe and mail today) Thanks!

Q: I have been doing some private 2nd mortgage investing and even though they pay and attractive 16% annually, you are locked in for 2 year. Instead, the Life and Bank Split Corp--symbol LBS has been recommended to replace some of the more riskier 2nd mortage investments. Can you please provide and opinion?

Q: This isn't a question, but a suggestion to those who are looking for much higher yield than treasury bills and government bonds with many of them trading at very low risk. The preferred side of split shares. There are several of them yielding anywhere from 4 to 6%. They are redeemable anywhere from one year to 6 years with a downside protection up to 100 % or more. Liquidity however is an issue with some of them. You just have to be selective.

Q: Hi 5i Team,

I read an article on Seeking Alpha today recommending a play on gold and silver via a closed-end fund called Central Fund of Canada (CEF). It is supposed to be trading at a 5% discount and that is meant to be unusual (but it happens from time to time).

Any time someone writes about "free" money I am suspicious. Do you have any comments about this investment alternative? The article is here: http://seekingalpha.com/article/2310905-how-to-get-a-big-discount-on-gold?ifp=0

Thanks again for your great service.

Michael

Q: Hi Peter and Ryan, could you please provide any insight into Manulife U.S. Regional Bank Trust. Fees etc, would it potentially be a good investment.
Many thanks.

Q: Interested in you investment opinion on BSO.UN. Thanks