Investment Q&A

Q: Please compare the risk of CVD vs CBO. I note that CVD has a lower duration so I assume it would hold its value better should interest rates increase. Please comment on the duration and other risk factors. Thank you.

Q: Hi 5i: This comment/question relates to the many questions asked recently about CBO, with particular reference to Rob Carrick's comments. In March, Manfred asked about the disparity between CBO's indicated yield of about 4% and the best corporate bond yield that he could find (2.5%). On May 20 Alayne asked about Carrick's article that claims that the indicated yields badly overestimate the actual yields. Carrick refers to the "yield to maturity", and in your response you said that the point "about the GIC ladder" is valid (namely that an investor is as well off or better with a GIC ladder in place of CBO). These comments still puzzle me. For the last 8 months (for example), the CBO price has been $19.8 +/- $0.1, and the indicated yield has remained above 4%. Thus over this period, at least, Carrick's point about GIC ladders has been false. The dividend is paid monthly and I have received it - no question. The emphasis on yield to maturity seems to me misplaced, at least to a degree. The response you got from the CBO people (in response to John's question) stated that they sell all bonds once they get within a year of maturity. Thus for short term bonds the YTM is not the relevant comparison; you would need to know the "yield to maturity minus one year". The difference between this and YTM could be considerable for a two year bond, for example. I'd appreciate your comments - this whole issue has puzzled me for a while.

Q: What are your thoughts on the Brazil economy. I own a small stake in XBZ, which has provided a decent return over the last year, although it is quite volatile. With the upcoming World Cup and the media attention this will bring, do you think now is a good time to sell my stake in XBZ and wait until after the World Cup finishes to reinvest in this ETF?

Q: As income sources in an RRSP which one would you regard as higher risk, XHY or TMC? Thanks

Q: Hello 5i
Thanks for the great responses. I am having trouble finding a post where you answered questions on fixed income, suggesting which bond etf’s you would use at the moment, both in the American and Canadian market. I cannot find it through the symbol search, as it is a general category question. I wonder if you could point me to that post or, sorry about the repetition, let me know once again what you would choose for fixed income at the moment.
thanks

Q: I have RBC managing a portion of my portfolio (RRSP). I have not been impressed with their service. They had the majority of my money in long term bonds earning a pittance plus they were bought at a premium. My overall return has been a abysmal but they still collect their management fee of 1.5%. ( I started with $450,000 6 yrs ago and now have $400,000) I recently got annoyed with this lack of performance and instructed them to sell the various bonds. Now I need to place the cash. Any suggestions?
RBC is suggesting a series of GIC's and some bond funds such as : Ipco monthly income,I shares advantaged short duration high income ETF,Lysander corporate value bond class templeton global bond fund.

I am 72 and must take money out of my RRSP whether I need it or not...
Can't thank you enough for this great service.

Q: good evening,
just wondering your thoughts on XDV growth over the next 6 months?Thanks!

Q: The question on CBO was interesting and as a result I went to the CBO web site to look at the bond holdings. I hold CBO and assumed that CBO was a laddered bong portfolio with maturities ranging from 1 to 5 years. If I was to build a laddered bond portfolio I would have 20% of the capital in one year maturities, 20% in 2 year maturities and so forth up to 5 years. And as bonds matured each year I would roll the proceeds into a new 5 year bond. What I fail to understand, however, is why CBO has bonds that mature in 2036, 2049 and even 2068. How can I-shares rationalize the objective of the fund while holding bonds with these type of maturities. I am baffled and would appreciate your thoughts. Thanks.

Q: Hi

Could you share your favorites in these categories of ETFS

Canadian bond index
Preferred share index
Canadian equity index (large cap)
US equity index (large cap)
International equity index (large cap)
REIT index (Canadian)

Q: Good afternoon 5I, Re: CBO, laddered bond ETF, Rob Carrick has an article on Globeinvestor saying that the actual yield is only 1.6% and not the 4+% shown on the stock charts. He seems to claim we are being
hoodwinked by just about everyone on the actual returns on these ETF's and that a ladder of GIC's would beat the ETF's hands down. Your opinion on this would be appreciated. Thank you

Q: Hello,

I have 30K in my RRSP account in ISHARES CDN S/T BOND ETF XSB . Are there better options to invest the money?

Thanks

Q: dear 5i team: I know stocks are the best way to go compared to mutual funds but if an investor wanted a hands off approach to investing to save himself from himself could you advise for a core allin one holding would you compare phn balanced D seires .88 mer and btg772 balanced 1.21 mer and steadyhand founders fund 1.34mer. this would be a retirment holding. of note btg seems to beat phn inspite of higher mer.and if i buy steady hand with my capital my mer would be 1.07 and with a lower unit price i would get far more units for capital appreciation.hope this is not to vauge a question thank you larry

Q: Hello Peter and 5i, Just been looking at the chart for ZMT. When every advisor on the planet is telling everyone to stay away from the base metals materials sector, why has this ticker done so well the past year. Is this an example of the big money buying stuff early so they can sell it to the street in a year or so?

Q: Hello and thank you for your work. There was an interesting guest on BNN talking about his bond fund and long/short strategies. Being quite hopeless with bonds, but thinking about some for a RRIF account. Is the fund ECF.UN a good fit.
Thanks D.V.

Q: Could you recommend a TSX Inverse and/or Bear ETF please.

Thank You As Always
Craig

Q: Thoughts on xgb at this time? Risk of deflation in Canada?

Q: Hi Peter and Team,
What are you and your teams thoughts of newer emerging economies in Africa vs. more well known areas of China/India. Is there a recommended Canadian ETF (or even company) that takes advantage of this potential growth?

Q: hi what do you think of SPFF(super income preferred ETF).Risk and reward.Thanks and have a good day.EBRAHIM

Q: Could I please have your opinion on IWO ETF? Thank You

Q: Hi team:
I bought some CPD (ETF for preferred shares) in my investment account about a year ago, it went down abit, but in the last few months it has rebounded and I am now no longer in the red
It was for income, but with the impending rising rates, would it be at risk of dropping in value ?
I realized that this could be a window of opportunity to get out and get into something like CDZ to get a nice dividend with some growth potential (I can tolerate the risks), thanks team!