Investment Q&A

Q: How would you rank these bond funds. I sold FTB and bought PMIF but it is not performing well. Bond funds have not performed well due to the drop in interest rates. I am retired in my late 70’s.

Q: Many high quality bond ETFs are trading at substantial discounts to their NAV. How can this be as the ETF should be representing the value of the underlying bonds? Are bonds being sold so fast that the market makers just can not keep-up with the pace? If XCB and XRB return to their NAV value this could be a buying opportunity? Thanks Ron

Q: A few questions have been asked about covered call products and I know that the bounce back will not be as high as a Plain Vanilla ETF. The question remains how much are you actually losing out on? Would the fund just not repurchase right away when called out so when things normalize, you may be out 5 to 10 percent as a guess? I am just hoping that the loss is not that bad

Q: Please comment on the uptick of the US investment grade corporate bond ETF XIG today. Do you still feel this is a suitable complement to a core fixed income holding of ZAG? Thank-you.

Q: Should I continue to hold these 3 in both cash and RRSP accounts.
What would be a good replacement
I can use the loss for capital gains in my cash accounts make in January 2020.
Thank you
Sincerely
Mike

Q: Last year, I purchased a number of ETFs to reduce risk. With the recent stock turmoil, they are all in significant loss positions. If possible, I would like to crystallize my losses now for tax purposes. However, I am comfortable longer-term with my portfolio's geographic and sectoral allocations, and do not want to change my set-up.

Am I allowed by the CRA to claim a tax loss in a non-registered account if I sell an index ETF (e.g. VSP - Vanguard S&P 500 index hedged) and immediately purchase an ETF from another company which represents the same index (e.g. ZUE - BMO's equivalent S&P 500 hedged index ETF), or is this considered a superficial tax loss?

Thanks again for all of your excellent advice and insights.

Q: Looking for a 2nd opinion.
My wife has stayed out of the stock market for quite some time. I think now's a great time to get in.
We've got about $75K in her RRSP/LIRA My strategy for her is as follows:
XBB 20%
VCN 15%
XUS 40%
XAW 25%
The plan is to buy in in installments over the next 3 months.
Are there alternate ETFs that may be better than the allocation above?
Does this strike you as reasonable ?

Q: I was reading your answer to Dennis about fixed income bonds from banks. I know very little about CBO and Bank bonds but asssume they are near risk free. Do you think there is an arbitrage opportunity in borrowing on a secured line of credit to buy a bank bond? Any particular bond that you can suggest and can they be bought on online self directed brokerage accounts with Canadian banks?
Regards

Q: Do you have any information on this company? Thanks, Phil

Q: Retired dividend-income investor. I currently own ZLB (in RRSP, max'd out, love it) ZRE (Cash account, purchase for LT hold-distributions, plan to add to it over time) and ZWC (Cash account, purchased for LT hold-dividends).

I have a sizeable capital loss in ZWC....2 choices. #1 = Keep it, top it up over the next several months. #2 = Sell it, save the capital losses for future years (don't need them for 2020) and replace with either CDZ or XDV. I flushed XDV right away due to the very skewed asset allocation (to financials & utilities).

So that left the comparison between ZWC and CDZ. Their metrics are, for the most part, similar (beta, P/E, P/CF, ROE, MER).

ZWC is down 39% YTD, pays a current yield of 11%, has a reasonable asset allocation (the 22% energy allocation initially may seem high but might be good for the eventual rebound). However, I don't have the knowledge on how the Covered Call part of ZWC may impact the comparison with CDZ.

CDZ is down 43% YTD, pays a current yield of 6%, but has a slightly more diverse asset allocation and has performed better than ZWC over a 3 year period, but has a higher Beta.

I entered the comparison exercise believing I would conclude to sell ZWC. Now however I might just periodically top it up. Your thoughts please?

Thanks....Steve

Q: I have approached my stop losses in these investments, should I sell to try to preserve capital to re-enter the market later after a bottom is more likely?? Say when the VIX is below 40? I kronor you can't give personal advice, just wondering what you would do, I'm 68 and retired, thank you.

Q: Is there a US dollar equivalent?

Q: Thanks for your great insight as we move through these uncertain times. U.S. Banks will be under pressure with the current virus and oil crisis taking it's toll. Some (or all) may need a bailout. What is your opinion on the risk going forward for U. S. banks, and are there U.S. Bank ETF's that trade in Cdn. $$'s on the TSX, that you feel are reasonably stable longer term, and offer the best way to play this sector at some point going forward. Thanks. Warren

Q: Hi
Do you like XEI?
Is there anything you don't like about it?
I'm looking for monthly dividend income from the different sectors.
It seems to hold most of the "usual suspects" with a pretty low MER (0.22%).
Thanks

Q: Hello 5i Research
Please recommend a Canadian ETF or index the tracks the Dow Jones index that would also participate if the Canadian dollar rise compare to the US dollar.
Thanks
Claudio

Q: Hello,
I’d like your opinion on phys.ca. I’m holding a small amount that I bought at $13 and the price is down a little. Is now a good time to average in or do you think it’s still too early?. What are your thoughts on Projections of $1800 plus per oz? This will still be a relatively small holding in a trading account.

As always thank you for your insight.
Dave

Q: Realizing that you don't have a crystal ball can you suggest how safe you think the dividends are for DIV, FRU and A&W?
I am seeking dividends in a registered account and if the dividends from the above companies are threatened or cut I guess the stock price would would really collapse. I am thinking I could sell and replace them with a much safer dividend ETF like FDV (or anthing you suggest). On the other hand, if you think they might be
Ok, they sure are paying one heck of a dividend right now and if the stock price could recover in due course I would just be as well off continuing to hold.

Q: Do you like the Preffered space at this point. Would you be a buyer of any of CPD, ZPR or HPR? Thanks for your valuable advice. Rob

Q: Thanks for all your hard work during this uncertain period.

I'm transferring conservative Mutual fund monies (to get out from under their fees) over to Questrade.

I want to keep that money conservative. I'm not drawing back, but just trying to keep my allocation.

I've read that similar bond ETFs are not the best way to go forward. Some recommend cash, even US cash but this seems too fearful.

Please recommend an ETF option for this situation.

Q: Hi Peter & 5i,
Thank you for all your professional advice with your years of experience and calmness during this market turmoil.
My question is about bonds.
I have a portion of my fixed income in CBO.
Currently a retail investor can pick up some fixed income bond/debenture from the above mentioned banks with longer term maturities (say 2028 to 2030, they are callable between 2024 and 2026) with a 4% interest rate at current valuations (which are below $100). Even if they did get called then you would get the capital gain and the better interest rate for 4 to 6 years.
Do you think it would make sense to sell a bit of CBO and buy a few of these bank instruments in the current environment?
Your opinion is much appreciated. Thank you.