Investment Q&A

Q: I have a large portfolio of 1.3 Mil in value. They are accross all sectors. I will be adding another 200k shortly. I have no precious metals in my portfolio as I was not comfortable with the volatility. What would you suggest for percentage amount of precious metals and what companies, ETF's
would you suggest. Is holding physical gold less volatile that companies?
If so, is there an ETF that holds physical gold.

Q: I currently hold BPY (up 50% over cost) and H&R in my portfolio 4% and 3% respectively.
I am considering swapping BPY for BEP for the additional income. Your thoughts?

I also plan to crystallize my capital losses and purchase the following ETFs:
Non registered:
ZPW – US Put Write
ZWE – Europe Covered Call hedged to CAD.
ZWH – US covered call
CPD – CAD preferred
XRE – Capped REIT

Registered (RRIF):
PGX:US – Preferred.

Each would constitute 2% - 3% of my portfolio. Diversification is my intention, but risk and surety of income is the primary consideration in all of the above noted.

Again, your thoughts.

Thank you for considering my questions

Gail

Q: I am thinking of adding US financial services to my diversified rsp portfolio. I am ideally looking for a CDN dollar etf that invests in/takes advantage of value priced US financials at close to book. Bank of America, Citigroup are examples. Time frame is 7 to 10 years. Thanks as always

Q: Hi, I have been comparing low-volatility developed ETF options traded in Canada with the options (to my knowledge) being ZLI and XMI. My analysis has sided with ZLI and I want to layout the logic here to hear your thoughts. Positives for ZLI: Smaller market cap while not too small offers better opportunity for alpha, Fewer holdings so more opportunity for alpha, Not based on major index (MSCI) so less opportunity to be front-run, BMO has a good track record for other similar funds (e.g. ZLU). Positives XMI: Longer operating history , Slightly lower MER, more resources for investment research(?). Thanks as always.

Q: About Tak's question on how to play oil, I have something to add. If you want to buy it with canadian dollars, one option is Horizon's non-leverage ETF $HUC. The volume it not great but O.K. Free to buy/sell that ETF on iTrade by the way. That's been my favorite vehicle because of it. Hope that helps.

Q: Hello Gentlemen

Rather than keeping up with so many individual companies in the US I am considering the ETF USMV. Do you think this is a suitable choice for a conservative investor?

Other options you would suggest are, of course, welcome.

Thanks.

Q: I am looking for general advice on the fixed income side of a portfolio. Where should I go to find fixed income that has a decent return? Or should I not worry about that, and concentrate on dividends from stable companies.

I have about 10% cash, and 10% altogether in ZPR, CVD, CSU.DB (all three obviously not fixed income). BTW, retirement in ten years or so.

Q: Is ZPR primarily constructed of rate reset preferred shares and if yes would this ETF be a good investment right now for income and capital preservation?

Ken

Q: I am considering purchasing a preferred ETF. Perhaps, one of CPD, ZPR, PPS or HPR. I notice that HPR has the lowest yield and highest MER but over the past 5 years it has done appreciable better; i.e., lost quite a bit less, than the other three. Is this attributable to its 'active' management or is there something different about its diversity of preferred shares?

Q: I have very little in the way of investments outside Canada except for TD's US exposure, ATD.B's exposure in Europe & the US & TIO 's US exposure.Which of the following ETFs would you consider to be good ones to expand my exposure outside Canada & if you don't like any of them can you suggest some alternatives you like better? The ETFs are:ASHR , DXJ ,LEMB

Q: Good day 5i Team, I have a diversified registered stock portfolio loosely mirroring 5i's balanced leaning toward growth stocks (with Europe & US dividend etf exposure). I am long term with this but am looking for hedge against any broad market declines. Can you briefly explain and recommend inverse etf's as a suitable hedge against this.
Thank you for your valued advice

Q: What is your opinion on using call options on the VIX Short Term Futures ETN (VXX:US) as a hedge against a market decline? I see the VIX index up over 7% today, but the VXX is down slightly. I have noticed this several times. What is the explanation for this divergence and how should it be interpreted?

Q: Hi 5iResearch Team
I am reviewing the tax treatment of distributions for companies I hold shares/units in and I am having trouble finding information on the tax treatment for the distributions from kwh.un, acr.un, apr.un and xhy.
Can you help me out?
Thanks

Q: Morning,
Is there way to play the oil/gas like the GLD in gold ?
Thank you and Regards,
Tak

Q: Thank you for providing a great service. Your recent comments on the Canadian Preferred Share Market and iShares CPD are greatly appreciated.
Please comment on
1) Please comment on iShares US Pfd Stock ETF (PFF) which trades in US$.
2) Is there any merit in holding a portion of a fixed income portfolio. PFF is about 5% of my total portfolio. Considering the recent upswing I have done well with PFF and have enjoyed the distributions within a registered RRSP. Should I consider holding it?

Thanks

Stephen

Q: Peter; Gold is up roughly $10-11. this am and the XGD is down, along with gold stocks of course. Does this indicate anything to you from your trading days m I.e. is the " market" saying the stocks are overdone or? Thanks, Rod

Q: I recently added CPD for fixed income, how do you think it will perform going forward given a Sept/Dec US rate increase? Thanks.

Q: Preferred shares and fixed income

Hi 5i team : I own only common stocks in my portfolio and since I am a mature person that is near retirement, I have the feeling that my exposure to common stocks is very high. So far, to mitigate my risk, I keep daily of the market changes, so I do not get caught in a drastic downturn.
To get more protection, I have thought in buying some preferred shares , but I know nothing about them to start a position.
Are the P.S. a good way to go ?, if so, what should I learn about them and how (references, books, etc), also what would be a reasonable percentage of my portfolio to have in P.S.?
thanks for your help
Alex

Q: I'm considering adding a 3% emerging markets component to a growth portfolio. The two ETFs I am looking at are ZEM (C$) and EEM (US$). They both track the same index, ZEMs MER is about half that of EEM and its dividend is slightly higher. It is however, much smaller with a 157M market cap vs. 27.8 for EEM. Is the size differential a concern?

Q: Good morning Peter, Ryan, and Team,

I submitted this question about a week ago, but guess that it must be "floating" in cyberspace! Here it is again:

There was an article in the July 18th Globe & Mail called "It’s time
for investors to reassess their rainy-day funds". The author
believes that too many investors keep too much money in low-
interest bank accounts and money-market funds. Instead, he
states that "intermediate-term bonds, over the long run, are
superior not just to cash but to long-term bonds as well. So when
thinking about where to invest your fixed income assets,
remember Goldilocks: The best place to be is not too long and
not too short. The place to be is what is essentially a large “sweet
spot” between short and intermediate. That’s where the reward-
risk trade-off is at its greatest."

Assuming that one agrees with this thesis, what fixed-income ETFs would you recommend that could fit the bill?

Thanks as always for your valued advice.