Investment Q&A

Q: Hello 5i team,

I have 500k in US $'s to invest and my RSP and TFSA are both maxed out. My plan is to use this money to primarily generate income through US ETF's and US dividend stocks. With my RSP maxed out is there another strategy to avoid the 15% withholding tax, besides using the US $'s to buy CDN income producing investments. And could you please provide a few ETF's in US $'s that have a focus on income/high yielding.

Thank you,

Glen

Q: I have the above international ETF's in my RIF at a total allocation of 39%. I am interested in your assessment of my choices. Any duplication? Should I delete any? What should I add in it's place? Any suggestions are appreciated. Thanks for adding analytics. It's a great assist.

Q: Hi

Any opinion on VWOB EM gov bond etf ? I already own some CVD and XHY. Would you consider this a good investment (high yield) for bond exposure outside Canada/US and considering slowing global growth and very high equity valuations.

Regards

Daniel

Q: Just following up on Alex's followup to my question on the XGRO etf.
XGRO is an old fund that was revamped to compete with VGRO. The Morningstar number is incorrect. The .84 MER listed is for the OLD fund.
XGRO couldn't possibly compete with VGRO's .25 MER or ZGRO's .18 MER with a MER of .84. It's listed management fee is .18. After regulatory fees and taxes and such the final MER may go up to a couple of basis points.

Q: 55 years old,will work at least to age 60 and will have a large pension.Have about $100,000 to invest long term with no need to use any of it in the foreseeable future,
Please recommend an ETF for Canadian market (moderate risk,and tilted more to growth than to income) and an ETF for US markets (moderate risk and tilted more to growth than to income).
If you think two ETFs for each of Canada and US would be better than one for each,please elaborate.

Q: Thank you for for answer yesterday about setting up my parent's investments. To summarize, they are very conservative, above 80 years old, and looking for safety and income.

I would now like to ask you about the distribution of the equity component of the investments (composing only 17% of the total, the rest being in bonds, preferred, and GICs). Those below are all in equal weight. What do you thing?

BEP.UN, BCE, BNS, CM, CU, ENB, TRP
XHC for healthcare exposure
IWO for US growth
VGG for US exposure
XEF (in a half position) for international exposure
VEE (in a half position) for emerging market exposure

Could you please suggest some more to round things out? I need another 5 or 6 stocks.


Also, do you have any objection to using ZAG and HYGH as bond substitutes for their conservative portfolio? I am buying individual preferred shares for that component.

Thank you once again,

Fed

Q: What is the difference between these two companies from an investors point of view besides the operating country’s ?
Would either be solid enough long term as a core holding?
Thank you

Q: Good morning,
This is a follow up to my previous question re: Horizons Total Return Index ETFs and more specifically HXT:CA and HXS:CA that I intended to purchase as long term core investments in my grandchildrens' in trust accounts prior to recent proposed changes in the recent federal budget affecting the favourable tax treatment of Horizons Total Return ETFs (No distributions).
I'm still searching for a few great investment ideas that would be suitable as a long term hold in my grand children in trust accounts. IWO and QQQ were mentioned as potential candidates given their relatively low distributions but given that the in trust accounts are already set up to hold investments in CDN $$$ and to offset currency risk, could you please recommend three or four ETFs, stocks or combination thereof that distribute little or no distributions and that you believe would be suitable as a long term hold in my grandchildren in trust accounts. My intention is to invest approximately $50K in each in trust account. I thank you in advance and look forward to your specific recommendations.

Q: Could you confirm that if I buy bonds in an ETF, they pay dividends rather than interest and are therefore taxed at a preferential rate. If I buy bonds, they pay interest which is taxed at a higher rate.
Are all management fees for investments held with a financial advisor tax deductible or only those held in non registered accounts (margin accounts).
Would management fees for RRIFs, RRSPs and TFSAs qualify for a tax deduction?

Could you confirm that if I hold securities in foreign securities such as Berkshire and have bank deposits in foreign currencies one is required to declare any amounts exceeding $100,000. Is this amount at cost or retail value of the security. Is this calculated in Canadian currency? Are foreign investments held in registered accounts (RRIFs, RRSPs and TFSAs exempt of this declaration. Could this be avoided by holding Canadian securities that have foreign investments such as TD, Brookfield (BEP.UN, BPY.UN, BIP.UN, BAM.A)? How does one calculate the value considering the volatility of the exchange rate if it is to be converted to Canadian currency?
I assume it is calculated on the cost of the security to avoid the volatility of the security.

Q: I hold both VEE and VEF in a Cdn dollar trading account,; given that we are unlikely to see any substantial appreciation in the Cdn $$ for a while, is that a duplication, and if so, would it make more sense to just keep the unhedged version?

Q: Hi 5i team,

For non registered accounts, when I buy ETFs that invested in US or international stocks, or in US or international bonds, would I have to include the cost of these purchases as foreign properties to be reported on T1135 to CRA?
Thanks.

Q: Like a lot of investors I am looking at increasing my U S holdings. Is targeting the medical sector advisable given the politics that could come into play in the U S? If advisable would you put 2% (sector weight) in each one or prefer 4% in a single ETF?

Q: I am looking for a US dollar Emerging Market ETF that I can purchase for my portfolio

Q: Are there any water rights funds in Canada that you’re aware of, or farm land reits?
What would you suggest for warehouse/industrial land reits in Canada and US?
Thanks.

Q: This is a follow up question about a portfolio for my parents. Thank you for your response, yet again.

You suggested an ETF for growth as another option. How about XHC and IWO? Any other suggestions?

You mentioned that tax reporting for trusts are a nuisance. I agree. But if I put it in an RRIF, which would you suggest?

Thanks again,

Fed

Q: Could I please have a few of your top Smart Beta ETFs recommendations. I was hoping to get a few ETF ideas that cover USA, global and international only. A few that trade on the TSX and in the USA would be great. Thanks

Q: Could you offer me a suggestion for a dividend income etf. Also going forward with a corrrection coming would this be a moderately safe position thank you Ken

Q: Hi 5i,
HXQ vs. XQQ – Questions and Comment: 1. Is the XQQ’s dividend subject to US tax withholding? 2. If not, is it eligible for the Canadian dividend tax credit? 3. My discount brokerage site indicates that the MER on HXQ is actually lower than that of the XQQ but I understood you to suggest otherwise. Can you please just confirm on that one?
It seems to me the elimination of the total return feature of the HXQ may not be the most important element in deciding between these funds. The charting function I use shows HXQ to have outperformed XQQ measurably over a 3 year period. While some of that might be attributable to HXQ’s lower MER and ‘total return’ feature, isn’t the bulk of the difference attributable to the fact that HXQ is unhedged, while XQQ is CAD-hedged, and over the 3-year period HXQ’s return has been amplified by the Canadian dollar’s decline against the US buck? Or is there something else in the mix? In any case, maybe the decision on whether to switch from HXQ to XQQ should be mostly a matter of whether one would prefer to be CAD-hedged or currency-exposed over the anticipated investment timeframe. Whatever tax consequences might flow from the other variables involved, they could easily be overwhelmed by a currency move of a few percent and, in a taxable account, any gain on a currency move would remain tax-deferred until a disposition event. Even then, the applicable tax rate would still be the capital gains rate. So that aspect of HXQ’s tax efficiency would be preserved. HXQ may not end up being as tax efficient as it was when it could avoid cash distributions. But if it is just going to have a yield akin to XQQ’s 0.44%, and if available alternative holdings (like XQQ) are already doing that, the fact that HXQ may have to pay a distribution may not be the most important consideration for a switch decision. Or am I missing something? Thanks!

Q: Hello! Can you tell me if there is an etf that holds Chinese technology companies Baidu, Alibaba and Tencent? Thanks

Q: Hi 5i team,

Regarding your answer to Dennis on Apr 25 regarding holding VGRO in RRSP and tax on US dividends, I thought there is no tax on US dividends inside RRSP, am I missing something? Thanks.