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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: A former financial advisor friend of mine tells me to be cautious regarding ETFs in a downturn because they have not been tested yet. He informed me that the sale protocol is different between selling a mutual fund vs an ETF and that the ETF could be more volatile. So far I have found both to be less volatile than simply holding stocks which to me can move up and down much more rapidly. For example: PKI moves significantly from time to time while FAI which holds PKI among other stocks moves up and down marginally due to the variety of stocks held. That being said, if there is a strong correction would a mutual fund be a better hold than an ETF of similar holdings?
Read Answer Asked by John on May 30, 2017
Q: It seems like the places to be near and mid term are US and Europe for growth and not Canada for the time being. I have exposure in Canada already with Utility and Financial dividend payers which I will continue to hold, could you recommend your favorite ETFs for some exposure to US, Europe and possible Emerging markets if you like the EM.
Also, could you comment on the "Hedged to CAD" ETFs---It seems to me we trade ETFs like stocks through our brokerage accounts in CAD, so why worry what the ETF managers are doing as far as currency is concerned?
Read Answer Asked by Randy on May 26, 2017
Q: Hi 5i. Trying to improve sector allocations. Currently we have only 3.5% in Industrials.
I am looking at XGI - iShares S&P Global Industrials (CA$ hedged). This ETF has only 1 holding which is EXI - iShares Global Industrials US$ ETF. We are looking at investing CA$ funds and don't wish to convert. Questions :
- Do you think that XGI has sufficient size (current net assets ~$40M) for an investment ?
- Do you know if there is an "un-hedged" version of XGI ?
- Do you think that somewhere between 10 and 15% should be allocated to Industrials ?
- Any other thoughts on a Global Industrials ETF ?

As always, thanks for your help. Much apreciated. T
Read Answer Asked by Terrance on May 26, 2017
Q: What is the best way to access and evaluate high yield bonds in Canada and the U.S.? I would like to add some risk to my portfolio, and improve the yields. My online investment platforms (RBC,TD) do not seem to make them available. Is there a better way?
Read Answer Asked by Michael on May 26, 2017
Q: My portfolio has been sitting unchanged for some time (2 yrs), many winners are 5i recommendations, some not so much. With that said, my portfolio is well underperforming the model equity portfolio. Below are my current holdings. If I am to sell off those not included, and change the weight to match those in the model portfolio, how would you go about executing this? Big bang? Are there names you would wait to get into today, or those that you are considering a change in the near future? The value is about 500K, so the trades(from my perspective) will be significant. % are approximate on the add side. Your advise would be really appreciated.

AYA-6.3 (%) - Sell
AVO - 3.7 - Sell
BAD - 3.5 - Increase to 5%
BNS - 6.3 - trim to 5%
BDI - .6 - Sell
CGX - 4.8 - Sell
CSU - 5.6 - No Change
DSG - 4.0 - Sell
DHX - 3.7 - Sell
ENB - 3.5 - Maintain
ENGH - 4.2 - Maintain
XTC - 1.05 - Sell
HCG - 1.1 (ugh) - Sell and burn transaction receipt
MUX - 4.6 - Sell
PKI - 6.4 - Trim to 5%
PLI - 2 - Sell
SSL - 3.8 - Sell
TOY - 6.7 - Trim to 5%
STN - 3.8 - Sell
SJ - 4.1 - Maintain
SLF - 5.2 - Maintain
SYZ - 4.1 - Trim to 3%
TOU - 3.5 - Sell
WCP - .7 - Increase to 3%
Add: AEM 3%, AIF 3%, ATD 4%, CCL 5%, CLS 3%, CXI 3%, GUD 3%, MG 5%, MX 3%, KXS 5%, NFI 3%, PBH 5%, SIS 5%, T 3%, WSP 4%

Also - (I have asked about as many questions of late as I have traded) - for RESP for 4 yr old, roughly 12K in there now, where would you park this given building a portfolio of names is a challenge with the limited funds.

Thanks,

Eric

Read Answer Asked by Erichsen on May 25, 2017
Q: Hi there,

A few weeks ago you had suggested to maybe add XAW to my portfolio (which follows your Balanced Equity Portfolio) for outside Canada exposure. In a portfolio of 100% equities - how much would you recommend being put towards the Balanced Equity Portfolio and XAW?

Thanks!
Read Answer Asked by Michael on May 25, 2017
Q: Hi, Is something like PMM or HHF (even if higher expense ratio) or other alternative EFT a viable substitute for Bonds as a portfolio diversifier? Thanks for the valued opinion.
Read Answer Asked by Boyd on May 24, 2017
Q: I have decided to look outside of Canada for small cap exposure. I am interested in either a mutual fund or ETF in a non emerging market economy. Currently own Russell 2000. What other recommendations would you have for both USA and elsewhere. Can be either Canadian or U.S dollars.

Thanks

Paul
Read Answer Asked by paul on May 24, 2017
Q: My portfolio is based almost entirely on your balanced equity but I have two international ETFs, ZDM and ZUE. (only about 7% of the portfolio, total). I have two Canadian ETFs, ZLB (has done reasonably well, +32% in two years) and HAC (up but not really spectacular). It strikes me that I am missing an opportunity to diversify further internationally by moving the two Canadian ETFs. If you agree, can you recommend any to consider? I
Read Answer Asked by Fred on May 24, 2017
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