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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hello 5i Team,

My question is regarding the iShares Core MSCI Canadian Quality Dividend ETF. It hasn’t been around for very long and with less than 2 dozen holdings, it’s a rather concentrated fund. What do you think of MSCI’s quality screen? Would this be an appropriate core holding in a Canadian income portfolio?

Additionally, for funds with short histories such as XDIV, how much consideration would you give to the calculated historical performance of the underlying index published by companies such as MSCI, WisdomTree, etc. Are they a reliable tool in evaluating new funds?

Thank you!
Read Answer Asked by Olivier on April 26, 2018
Q: I guess I didnt make myself clear on an earlier question. I am looking for a US ETF that I can buy with canadian dollars, but unhedged. Preferably in the broad market, Technology, Financial and Health or a combination of all. I do not have a US account with my online brokerage.
Thanks again your service is supurb!
Read Answer Asked by Shirley on April 26, 2018
Q: I read with great interest your response to a recent query regarding Mackenzie Floating Rate Income. I have the same goal as the member who asked the initial question. Under what circumstances might MFT perform poorly? How do you think it compares with PMIF (Pimco Monthly Income Fund), in terms of correlation with equities, bear market/recessionary performance, and total return potential? I note that MFT has a greater proportion of holdings which are below investment grade, do you think PMIF would be the safer choice? Which would you prefer for long term, steady income and capital preservation, taking the relative MERs into account as well? Thank you.
Read Answer Asked by Walter on April 23, 2018
Q: I want to help an 86 year old relative - with no investment experience. She has a small RIF (less than 40k) and a TFSA, plus about 250k in unregistered funds -split among two institutions. As the DSCs have run out at the 'expensive' investor company I'm thinking it might make sense to consolidate all the funds at her bank (They are less pushy, have lower generally lower MERs, and it seems like DSCs are far less prevalent). But choosing an appropriate investment for the funds (about 150k) being moved is my quandary.

Preservation of capital is important, but she does want some income. Any suggestion apart from GICs?

Thanks
Read Answer Asked by Peter on April 23, 2018
Q: My question is about building my etf portfolio. As I'm young and long term oriented, I would like to allocate a higher % to emerging market. Probably around 20%. I have analyzed many EM ETF and I have noticed how different in country allocation, value, sector allocation they are. Would they idea of buying, lets say 4 or 5 EM ETF that would represent that diversity, instead of one, make sense for you?
What would be the down sides? Cost doesn't appear to be one, has I can buy ETF for free, I don't mind the 'complexity' of rebalancing if my EM attribution goes up or down. I understand that EM might goes up or down has a group, but I found difficult to imagine that, in the longer term, an etf with 30% of Chinese shares and high PE and lots of tech, and one with more Indian, Russian and Brazilian shares, with low PE and energy would perform the same. Because I have no idea witch one will out or underperform, I would guess that this diversification would lower volatility and slightly decrease risk among my EM allocation. Feel free to comment this strategy or to challenge me about it.

Read Answer Asked by Olivier on April 23, 2018
Q: Hello! I'm a recent subscriber to 5i and liking what I see so far! I have a favorable view on the tech sector and own CQQQ and BABA. Any thoughts on these names or sector in general? Any other names that might be a good fit (besides Amazon)? I was also thinking VB would be a good way to play the tech and financial sector at the same time. How long has it being in the growth portfolio? Any other suggestions regarding niche banks?
Read Answer Asked by David on April 23, 2018
Q: 5-I,
I am looking at a managed portfolio of a friend who deals at Wood Gundy. They are comparing the performance of the portfolio to the "Value Balanced Index". It says it is a blended benchmark comprised of 40% DEX Universe, 20% S&P/TSX composite and 40% MSCI World. What would be the closest ETF to this index that I could follow on an exchange ?

Thanks

Paul
Read Answer Asked by paul on April 23, 2018
Q: I have reviewed prior question responses on PMIF and PMO005. I understand that both should behave similarly (PMIF should have higher return longterm due to lower MER). My question is on the distribution. The distribution yield on PMO005 is about 3-3.5% it appears; the distribution yield on PMIF appears to be smaller and with variations in the distribution from month to month. Do you think this is temporary, as PMIF is relatively new? Do you think overtime, the distributions of PMIF will stabilize and approximate those of PMO005 with a similar yield? If not, why not, if the portfolio composition is the same in each case?

My feeling is that PMIF is 'safer' than high yield bonds such as XHY and preferred shares such as CPD/ZPR, do you agree? I hope to pair this with some VSB as my fixed income allocation. Do you think PMIF is worth the MER of 0.87%? This is for longterm, all-weather hold (irrespective of where interest rates go in the near-term/longterm) for consistent income.

Thank you!
Read Answer Asked by Walter on April 20, 2018
Q: Hello, thinking of adding ZUB, or ZBK, as just made decent windfall short term gains on energy stocks in days , for the trade. Redeploy cash , Against social media’s commentary worked out many times perfectly so far. Before last Friday banks earnings, the media were full of ” earnings will be huge” then the very next day we’re like “reversals because fully priced in “...” growth concerns “ . . “ yield curve.....” and so on...
so what’s your take? Is it noise or seasonality trading or real concerns , so called smart money moves?
Thanks
Read Answer Asked by LEI on April 20, 2018
Q: I currently have a weighting of 8 % Canadian tech companies. For diversification I hold CSU, OTEX, SYZ, ENGH and KXS. My largest holdings are in the larger companies, specifically CSU at 5% and OTEX at 3%. I would like to diversify my portfolio into international stocks. To this end, in the high tech sphere I have started to buy XQQ. Since XQQ is an ETF, and so is diversified, I plan to bring XQQ up to 10%. Note that I currently have 20% in VFV. So my US exposure would be 20% VFV and 10% XQQ. Do you see any downside to this plan? Note that XQQ is hedged, are you aware of a US tech ETF that is not hedged?
Read Answer Asked by Dennis on April 19, 2018
Q: Could you please clarify how this ETF pricing mechanism works? My Qtrade website shows the current bid at $30.88 and ask at $30.91 (at approximately noon PT on Wed, April 18), yet the Day High shows $30.49. Is this indicating that there has not been any trading since the $30.49 price? I see a similar discrepancy with HXQ, but not with HXT where the bid price is exactly at the day high price. Thanks.
Read Answer Asked by David on April 18, 2018
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