Investment Q&A

Q: Which Biotech and Semiconductor ETFs would you recommended, in order of preference? I do not have any exposure to these sectors.

Q: In todays list, you mentioned to a subscriber to consider VOM.

This ETF has a tracking error of 5.03%, is this important?

Can you please explain "Tracking Error" for everyone, including me.

Q: From an investment perspective, is the primary reason to invest in a real return bond to receive the inflation-adjusted value of the principal at maturity to maintain purchasing power, and not so much to receive the "real" interest rate payout on invested capital along the way?

If this is so, is it better to hold individual bonds with fixed maturities of shorter duration rather than an ETF like ZRR where the value fluctuates with the perceived interest rate environment, and purchasing power isn't preserved because it never actually matures?

Q: Hi gang, could you please help me decide which one would you buy today? 3-5 years or should l buy both? Are both strong. ? Thanks
Alnoor

Q: Hello 5i-
what do we do with Canadian $ in cash. We've got cpp, oas, work pensions : however, all of this can go down significantly too and we need to preserve for our later years.- - my ? is this: what shoud we do with xtra cash now? Should we buy usa $, usa stocks, etfs? thank you for your time

Q: I hope you are all well and adapting to our new reality. I realize this is a US Closed End Fund , my apologizes. I have held it for some time in a rrif for income as well as growth I also hold XLK and a few canadian Tech stocks in that sector. It provides an ample dividend and I gain more upside from the others. Your thoughts?

Q: Hello

In support of Carl’s inquiry re zwb vs zeb performance similarity......I was watching the same positive correlation despite so many being negative on covered calls in up market.

Firstly, Carl should go to BMO etf website where they have an excellent webinar explanation of how the cc etf zwb, ZWC have been managed to benefit investors during the up side of the market.
Secondly, as it was explained......the simple answer to positive upside correlation (may not be permanent)..... It was achieved through extending out the option strike price to avoid shares being taken away, while at the same time experiencing the same or higher option premiums. The option premiums expanded and they played it well.
Active management in volatile market paid off in this case.
Dave

Q: Hi 5i,
Regarding ZWB- Bmo covered call utilities.
TD webroker shows yearly dividend to be 7.86% at 0.95/share.
I am trying to understand where this number comes from, since another chart, available in webroker, indicates actual monthly payment of .06 cents/mth x 12 months = .72 cents.
Can you shed some light on this for me ?
Thx.

Q: Revamping my 70 year old partner’s portfolio, looking for income and modest growth.

Being quite overweight in financials, wanting to exchange some or all of these positions: MKP, AI, TF, ZWB. Add to my BNS (currently 2%), and diversify into other sectors.
Is it worth keeping any of the Mortgage related MKP, AI, TF? Is FSZ lower risk? US banks/ETF?

I expected the upside of ZWB to be significantly less than ZEB, but when I compared the charts they seem like two dogs chasing the same ball, never far apart. Very similar up and downside, is that your view also?

Carl van Rossum

Q: What would be a good recovery play for funds in an RESP needed in 4 through 12 years? I sold half of my US based ETFs (VUN and VFV) near the top so I can move into something that hopefully outperforms the index, so to speak.
I am a little nervous about taking on over allocating to energy stocks and I have picked some up in my RRSP and TFSA and wondering about thoughts for the time frame referenced above. ETFs or stocks would be fine.
thanks.

Q: Hi gang, was looking into this ETF . How is the cloud business growth.? Long term. Any other etf to comparison. Or could you suggest something else. Thanks
Alnoor

Q: Are they etfs on the Tsx that give an equal weight to stocks in the Dow or the S and P 500 and do such products reduce the single stock risk in a market cap weighted etf? Thank you, Bill

Q: Hi 5i
Thanks for your sage advice during this pandemic period, I have found it very helpful.
My portfolio is pretty well balanced with a good mix of primarily Canadian stocks ( 5i) plus Cdn & US ETF's. I would like to add some exposure to the global markets, can you suggest a couple of ETF's that I should consider - either Cdn or US...

Q: My son approached me on some advice on investing. He is just starting off. My inclination is to suggest to him to stick to ETFs. Ideally a mix of CDN, US, Bond and International oriented ETFs . I have my preferences, but would like to know what you would suggest? I am guessing he is looking at a year window to start.

Q: With the level of debt monetization, fiat currencies are becoming concerning. I was considering contributing new money into my TFSA, but transferring the funds to a US TFSA, and investing directly into US securities instead of CDN.
Even with getting hit with the currency exchange rate and paying applicable withholding taxes within this account, would you recommend this or see any advantage to this, or would you prefer investing in Canadian hedged funds (i.e XQQ vs QQQ) instead?
Many thanks,
Tom

Q: what are the best companies to buy that will benefit from research and development of robotics? also is there an it there an ETF in this area that you like? thanks Richard

Q: Looking to add more exposure to companies in technology that will help drive growth of the economy not only in the near term but long term. Things like Software, AI, 5G, IOT, Self Driving Cars, etc. With HXQ ETF the pick is more the Nasdaq 100 which will contain a number of these companies. With ARKW and IGV looking at some speciality to help in the overall growth of my technology allocation. What are the thoughts on the 3 selected or do you have others you would recommend. Looking at ETF to get some broad exposure and reduce risk of picking individual stocks. Thanks as always.

Q: I understand that for an ETF such as ZQQ, that's hedged against C$, this fund would not be negatively impacted if C$ rises against its US counterpart. But if C$ loses value against US$, would the hedged ETF benefit from it? Or there will be no + or - impact on the value of the ETF.
As for un-hedged ETFs, I assume then the price of these ETFs are affected by a) the movements of the stocks they are holding; and b) the movements of C$ against the underlying currencies. Is my assumption correction.
Cheers,

Q: Hello 5i!

Appreciate all the great work.
I am looking for a canadian as well as US listed tech ETF. And semi-conductor fund to be held in my RRSP. Diversification and of course hoping for long term growth.
Currently XIT (TFSA). Using the room in RRSP for US listed dividend stocks/ETF's. Or whichever is the most tax and growth efficient.

I'm wondering what your top picks are in that sector and why? One concern of mine is some have a much higher mer. Is that worth the performance in the long run?

Or better bang for your buck on keeping fees low as usual and the most diverse fund. Company and cap wise. Hence holding a primarily large cap and semi conductor. Or just 1 solid all around.

If I'm missing a far better pick please enlighten me.

Thank you for putting together such a great site and program. Info is fantastic.

Q: I am looking at the fixed income side of my portfolio and I am questioning the wisdom of holding CLF. Now I know there can be some sense in holding bonds even when interest rates are low (ie for the yield to maturity (YTM) and for the possible capital appreciation if interest rates go even lower). But for CLF this barely applies: the avg YTM is only 0.56% and the avg duration is 2.66 years (according to the Blackrock website on Apr 27). Thus the potential capital appreciation is very capped as the appreciation would only be in the 1.5% range if interest rates dropped to 0 and yet the potential capital depreciation is much much larger if interest rates rise significantly. So one is risking capital for a very low ytm without much potential upside and if interest rates rise, a potential rather large downside. Wouldn't holding cash make more sense?