Investment Q&A

Q: I am a recent subscriber to your ETF newsletter. I find it very informative. Thank-you.
I have read with great interest your articles about tax efficiency of ETFs. I have two questions: (1) If a US ETF is held in a non-registered account, I understand that there is a 15% withholding tax on dividends. However, is this withholding tax not deducted from Canadian taxes payable? If a person is in, say a 40-50% tax bracket, how big an issue is this on an after-tax basis?; and (2) Where can I find out the tax impacts for each ETF before I consider making a purchase?

Thank you again for all of your excellent advice.

Q: It seems to me that emerging markets are starting to act a bit better as of late. Do you agree a move into EM at this time would be wise? If so, please suggest a few ways to play the trend. If not, give your reasons. Awaiting your respected analysis.

Q: I hold VSP Vanguard S&P 500 Index ETF (CAD-Hedged) in my RRIF. I am confused by the following comments in the February 2019 ETF & Mutual Fund Update under the title Exchange-Traded Funds for Your RRSP – “When it comes to Canadian-listed funds that hold U.S. equities or hold U.S. listed ETFs it is best to avoid them because U.S. dividend income is taxed on your behalf.” I had thought that VSP was appropriate for RRIF’s. Please advise.

Q: Good Morning,

Which would you choose for a TFSA, long term core holding? Currently mid thirties. Thanks

Q: Hi Peter,
I really enjoyed your appearance recently on BNN. I like the fact that you appear without notes, printouts, “model” prices or table-pounding buys, unlike some of the other guys.

I read your FP article on the weekend on asset and sector allocation. I agree 100% with getting the sector right - just look at commodities over the past many years. It is the larger asset allocation question (stocks vs. bonds) that puzzles me. For me, I am an equity guy and typically run 90-100% equities for better long run returns. Any remainder is cash looking for new opportunities.

I have never in my life bought a bond (or bond ETF), unless you count CSBs 40 years ago when they were at 12% plus; rates we will never see again in our lifetimes. I understand bonds for reducing volatility in your portfolio. Last fall showed the volatility of an all equity portfolio. Yet today, we are making a nice recovery. My question is if or how do bonds enhance your returns?

In Warren Buffett’s recent interview on CNBC, he said that given a choice of holding a 10 year government bond versus holding the S&P 500 for 10 years, he would buy the S&P in a second. He said the same thing for a 30 year comparison. I just can’t get comfortable with the idea of holding bonds to enhance your returns. If the primary advantage of bonds is to reduce the volatility of your portfolio, then I am fine without bonds.

Thanks again for your insight.
Dave

Q: Hello, curious as to your recommendations for my TFSA. I currently hold all stocks in my RRSP, and a mix of mutual funds and etfs in my TFSA. I will soon be making a new TFSA contribution and must decide between adding a new name or topping up existing holdings. Funds likely to be held for a few years. Current holdings, in equal parts are
ETF's RIT, XWD and ZQQ, mutual funds include Fidelity Far East and Canadian Growth.
Have thought of HMMJ as well as TDB 3098 as possibilities.
Your Thoughts Please and Thanks. Lavern

Q: Hi everyone
When investing in an ETF what market cap would make you feel comfortable with liquidity. Would this vary on whether this was on a US exchange or a Can. exchange.
Thanks

Q: Preferred Shares

Upon reviewing the holdings of the four (4) largest preferred share etf, I have noticed the majority of preferred shares are issued by the banks, insurance companies, electrical utilities and pipeline companies. I am a holder of the common shares of the same companies (as they are stable long term dividend payers).
The first question I have is am I increasing my "company" risk by holding both common and preferred shares of the same companies? Should I continue to buy the common shares, which are paying very close to the available preferred share yield and gain long term from dividend increases.
The second question is of the four etf listed, which is your preferred etf. Are there other Canadian Dividend eft I should look at?

Thanks in advance for your excellent service.

Stephen

Q: Dear 5i
When i look over the summary page for an ETF at Yahoo finance and Morningstar i see many stats on the ETF including but not limited to 12 month yield and expense ratio .
Firstly is the stated yield on that summary page generally net or gross of the expense ratio ?
Secondly whether its Yahoo finance , Morningstar or the free version of Bloomberg the yields and expense ratio numbers largely vary . Whats your recommendation for which site to use to more accurately reflect the real numbers ?
Thanks
Bill C

Q: ARKK / ARKW how are they different?

Q: What are the best ETF options to invest in the UK FTSE 100?

Q: Hello,
Looking to invest for new born kid(less than 6 months), putting aside 2000 to start and will invest every year. Please provide etf that would be focused on growth.. dont need this money for 20 years.
Thx

Q: Good Afternoon,
Is there a copper only ETF or just the blended base metal exposure like ZMT and XBM?
Thanks

Q: These ETF's have done well in the recovery. Too bad I missed it! Do you think they can keep going or should one wait for a pull back? Or would it be better to buy 2 or 3 specific reits? Wife's RRSP 5-10 year hold. Thanks

Q: I recently sold some Apple shares and want to invest about 10,000.00 in the US market. Stan Wong on BNN was quite high on ARKK. What are your thoughts?
Thanks, Lesley

Q: Recently a number of firms, including iShares, Templeton, BMO and Vanguard, have come out with asset allocation ETFs. These ETFs appear to be well diversified both geographically and sectorally. You can purchase these ETFs with various bond/equity ratios depending on your risk tolerance. What is your view about these ETFs? Would it make sense for a conservative, retired, investor to purchase one of these ETFs as their entire investment (and to sell their individual equities)? If you like these asset allocation ETFs, which one do you think is best for an RRSP, TFSA and a non-registered account?

Thank-you again for your excellent advice.

Q: The MSCI announced today that it was quadrupling the proportion of mainland shares in its global benchmarks. Do you feel that now is a good time to invest in a China ETF? If yes, what ETF would you recommend for a TFSA, and for a non-registered account?

Thank you as always for your excellent advice.

Q: Do you know a vanguard value ETF in the us that could be a good buy at present Thanks for your help Bob

Q: Hello,
I'd like to know your opinion on this newly launched ETF. It seems a better alternative to a bond ETF if held in a non-registered account. I couldn't find what the implied yield is likely to be. Do you have any idea? What are the main drawbacks to such an ETF?

Thanks

Q: I'm looking for a conservative etf to get US exposure. What do you think of RWU? Would you prefer it's hedged version?