Investment Q&A

Q: Want to simplify my RIF investing as I am almost 80. Can you recommend several etfs that provide an easier and more comprehensive approach; I have a number of dividend holdings but I would like to broaden my exposure to international markets. Thank you.

Q: I am retired and looking to park some cash. TCSH and MCAD appears to be another type of ETF being offered around fixed income. These ETFs along with ETFs like PSA and CASH seem to be a good place to park some cash for a while. What would your opinion be on the safety of either type of ETF and any advantages or disadvantages of either class of ETF?


Ken

Q: Hello 5i researchers,

I bought this ARKK ETF during the pandemic time ARKK's hype days. As of today, many stocks recovered from 2023 lows, but ARKK. I am kind of losing patience, especially watching their daily trade information they published, keeping buying losers and selling winners. May I have your view on this ETF? Hold or move on? Thank you.

Q: All different holdings, but what would be your order of preference (based on expected total return) with the next 12 months in mind. Thanks as always, great service.

Q: I am interested in buying some mid- to small-cap stocks. I am tracking some of the ones you mentioned and am considering them.

For non-experts though, it seems like it would be better to go the ETF route on such companies. Do you agree and can you recommend a couple of options in CAD and USD.

Q: Hello 5i,
I would like to buy HSAV.ca for a 1 year hold but I’m concerned about the erosion of the .62% premium and
price in a declining rate environment. I appreciate your thoughts. Would you still consider it a buy. It seems to be the only tax efficient HSIA available in Canada so perhaps it will always maintain its demand. Thank you.
Brad

Q: What are your thoughts on the portfolio diversification and growth potential of these securities? Thx!

Q: What’s your opinion on these new fixed income products?

Thanks and have a great day.

Q: Would you suggest an ETF for US-Midcap only (in $USD and/or $CDN).
I already have VB for SmallCap, TDB3093 for MidCap, SPY and QQQ. Too much overlap? Thanks.

Q: What would be your top ETF picks in the materials sector, either US or Canada?

Thanks.

Q: Utilities generally continue to take it on the chin. I realize- high capital, prolonged elevated rates etc. is this a good time to add to stakes here or not? Is this part of a longer term concern?

Q: What is driving the crypto market in the last few weeks. Buy, Hold or Sell

Q: Thank you for the Money Saver's email " Avoiding The Yield Trap " on covered call ETF's. Garth’s question and your answer from February 25, sparked more questions. Also read all the Q&A on HBND.

My understanding HBND is 50% covered call on Treasury ETFs (eg: TLT, VGLT, VGIT, etc.) with target yield of 10%. Dividend growth is reliant on interest rate rising. You answered on Oct 6, 2023: “…But if rates stagnate or decline….the yield on this ETF may come under pressure, but its unit price can see capital appreciation”. Expectation is interest rate may go down this year.

Is it better to invest in HBND or dividend grower in the long term? So, I created a spreadsheet to determine the breakeven period where a dividend grower will match the annual dividend paid by HBND if dividend yield stays around 10%. I choose four random dividend growers FTS, SLF, TD, T with average historical annual dividend growth of 5%, 9%, 6% and 7% respectively. Starting point: Annual dividend payment as of January 2, 2024, no DRIP and no additional stock purchases.

If HBND dividend yield target yield remains around 10%, the number of years, when the annual dividend grower payment would exceed HBND annual dividend payment for FTS in 18 years, SLF in 13 years, TD in 16 years and T in 8 years.

Based on these results, if a person requires dividend income is the next 10-12 years, than HBND is a possible income source. However, if the dividend income is not required for more than 10-12 years, a viable option is to purchase a dividend grower since the annual dividend amount should exceed HBND and continue to grow.

Note: This is a simplistic point of view since HBND target of yield may drop with interest rate expected to drop later this year, a dividend grower rate may drop, no drawdown in capital for more than 10 years or black swan events. This exercise is focus on dividend not capital appreciation. This exercise could be applied to other income stocks (eg: XHY, HPYT),

Is this logic flawed? What other points should I consider? Is there a role for HBND or other high yielders in wealth accumulation portfolio vs wealth decumulation phase? Inflation in the last couple of years has reinforced (for me) to consider dividend growth to be able to fund retirement income for hopefully a few decades.

Thank you for your thoughts.

Q: Hi Peter and 5iresearch
In my recent question about investing in basic materials I mentioned in my question XBM. In your response your comment was on XLB SPDR fund. Just want to be clear that you meant to recommend XLB SPDR fund and not XBM.

What do you think of XBM?
Thank you

Q: Is there any ETF that holds semiconductors equally instead of SMH? SMH holds 1/4 in Nvdia.

Thanks for the great service

Q: Would you be able to tell me the trailing and forward P/E for XRE and ZRE? What are your general thoughts for REITs over the next few years?
Thanks!

Q: I have read the following from Morgan Stanley's CIO:
- S&P 500's forward price-to-earnings ratio is over 20.4, the equivalent for the MSCI ACWI ex U.S. is around 13.5.
- That discount of nearly 35%, a 20-year low, is a two-standard-deviation event.
- Dividend yields for non-US equities are running above 3% - more than double that of the U.S. benchmark.

Do you think there is an out-sized opportunity to invest outside the US, beyond one's normal global diversification strategy? If so, what sectors, stock and/or ETF's do you recommend? Thanks.

Q: India is now or about to be the most populous country in the world and its economy appears strong. This should point towards solid growth going forward. What are your thoughts on this? If one wanted to invest in this scenario, how would they do it? Can you suggest ETFs that would mimic their future?

Q: Dear 5i
I`m sure i`ve asked this question before but i cannot find your answer to this question .
Do you have to include ETF's that are Canadian listed that hold US stocks such as HXS and ZSP as part of my foreign reporting re foreign assets on my taxes ?
Also i have 3 ETF's that apparently have Trust or Partnership income (ZLB,CDZ,ZSP ). I have not received this notification before from my brokerage firm so i'm assuming this is a relatively new structuring of these particular ETF's . That said , is trust and partnership income taxed more or less than other forms of income ? Are you taxed on this income derived from capital gains , dividend or interest income ?
Thanks
Bill C

Q: I have a very small amount invested in ETHX.B and my 22 year-old son is convinced I should have more invested in ethereum. I am a value investor in my 60s and just don't get cryptocurrency. Your comments appreciated regarding the future of ethereum.
Thanks!