Investment Q&A

Q: Hi,
Multuiple questions here, please deduct the credits you think are appropriate.

1) Can you please explain when it makes sense to hold a hedged version of an ETF
2) If one holds a Canadian ETF with US holdings, how does taxation work? Does it change whether they are held in a cash acct, TFSA, or RRSP and how?

Q: Interest rates are dropping but bond funds are getting clobbered - they normally would go up - is there fear that huge numbers of companies are going bankrupt such that bonds will not be repaid? It doesn't seem to matter whether short term or long term bonds - they are going down. XBB down 3%, ZAG down 3%, ZCS down 4% today so far. This seems crazy. Is this a buy opportunity for corporate bond funds or is the great depression about to happen and everything should be sold into cash?

Q: What Canadian ETF would you recommend today for covering the Nasdaq including the FANG stocks?

thanks
Paul

Q: Hi 5i team,
My question is regarding index ETFs for NASDAQ. Would you endorse HXQ for TFSA? Somehow, the daily chart of HXQ does not follow closely QQQ.
For RRSP, which one will you prefer? And how about for Non registered?
Thanks.

Q: I have both CLF and ZAG in my bond portfolio. CLF continues to go up as interest rates come down. ZAG was doing the same until the last two days. Do you think the drop in ZAG is due to the industrial bond component and business credit risk? If there is fear that businesses will default on their bonds, it might be appropriate to take profits in this fund.

Q: Do you see more downside to ZCS? And why ? It seems very safe in this environment but I want to make sure I understand the risks. Thank you!

Q: I have these 3 ETFs in my RRSP for fixed income exposure. I am strongly considering selling CBO and CLF, down approximately 3% each, to raise funds to buy stocks that are, in my opinion, getting to really attractive valuations today. I'll keep XHY because it is down a bit more (11%) and will likely recover as things improve. Is this an acceptable strategy in times like these. 25+ years until retirement.

Thanks,
Jason

Q: In my RRSP accounts I have built up a laddered GIC portfolio in addition to a variety of stocks and equity etfs, taking the income generated by the portfolio and adding to the ladder. Given the low rates for 5 yr GIC, under 2%, I’m thinking of taking this years income and purchasing CVD, which has a lower payout but more stability than the above mentioned Preferred share ETFs.
I may split my purchase between CVD and one of the above Preferred Share ETFs and am leaning towards ZPR as performance and MER of the 3 is similar but ZPR has a higher dividend payout.
In addition to better income, interest rates should be close to bottoming and if I stage my purchases over the next 3 months I will benefit from unit price appreciation when rates start going up and will have locked in a 5-6% return.
Your thoughts please.

Q: Hi Peter. I own ZWH.U which is down about 26%. I had thought that the covered call strategy would have provided some shelter from the downdraft, but it appears that really isn't the case. Oh well. My question relates to going forward. Since the covered call strategy will likely limit future gains, what ETF would you suggest for ZWH.U's replacement in my US accounts? thanks, J

Q: Peter and team
I sold off all my equities part way through this recent collapse.
I have followed your BPort, along with some picks from the GPort.
I do not have the time to diligently follow individual stocks anymore, and was thinking of switching to ETFs.
What are your thoughts about splitting some 400k in cash between ZCN,ZDV, and ZUE. Is there too much overlap in the two Canadian ETFs, and what are your thoughts on going with the "hedged" ZUE?
This is a non registered account. I am pretty sure that ZUE is treated as a Canadian Equity with no foreign withholding tax. Correct?
Thanks

Phil

Q: Hello 5i
This is a mixed bag inquiry. Looking for some perspectives on the above watch list. I m wanting to increase my overall US & tech sector exposure plus add to my CDN financials. All positions have yield income to weather the storm for the next few quarters
I m considering half positions (2%) in each.

Q: I always thought that it is wrong to regard bond etf's as fixed income. With all the equity carnage I also suffered a 4.46% draw down on XBB today. Individual bonds have a maturity date at which time your principle is returned; not so with XBB. Can you explain the reason for XBB falling off a cliff today. Thank you

Q: Hi, The XBB dropped 4.46% today. I dont understand why it dropped so much as it is supposed to be investment grade bonds and a protection against stock market decline. Do you know why?

Q: 5i
Being retired with~40 % in bond ETF`s as my fixed income and thus part of my relatively safe part of the portfolio , i was quite surprised when equities dropped so much today , that the bond ETF`s dropped considerably as well ie CBO , ZAG and XBB . They all dropped ~4% .
Can you help me to understand why bonds would drop so much under this scenario ? If investors are fleeing to safe havens such as treasuries and bonds and out of equities why do bond prices drop particularly as much as it did today ?
Thanks
Bill C.

Q: I am looking to pair ETFs or stocks for growth and safety. What do you think about this idea and XMU [or ZLU] and ZUQ, for example. What portfolio percentage would you allocate to this strategy?

Q: I am looking to invest in very safe very short term fixed income. I currently own PSA and CSAV in a non-registered account.
I am thinking of buying HSAV for an RRSP account and perhaps for a non-registered account. Your opinion please on HSAV - is it safe, has it been around long enough for liquidity purposes? Any comments on whether there is any preference or difference in owning this etf in either a registered versus a non-registered account? Thanks.

Q: Good day team, did you guys post/suggest US names to keep an eye on during this market correction? If you did, I can't seem to find it.

Additionally, for broad US exposure what etf is the most efficient in a tfsa?
Cheers

Q: I found this ETF when looking at some of the top ETF providers by AUM in Canada and noticed CI First asset was #5... this looks like a blend of ZUQ and VGG, what do you think compared to some of the other US dividend ETFs trading in Canada? Would you recommend it, and what would be your opinion on CAD Hedge vs Unhedged given where our dollar is trading currently and future outlook
Thank you for the great service

Q: Hi 5i team,
Looking at the broad US market index (apart from NASDAQ), which will be your top two index ETFs that will most likely provide the strongest gain and the quickest bounce when the market turns around? And why? Prefer Canadian listed ETFs if available.
Thanks.

Q: In February, I was adding to my fixed income and believing that interest rates would not go any lower, purchased ZFH. It, like so many other holdings, has been hammered. It now looks to me that rates probably are not going up, for an extended time. If that is correct, is there any chance that ZFH will recover when the market calms down and equity prices begin to improve? Thanks for your excellent service.