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Investment Q&A

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Q: Re your answer on the warrants. High finance seems as clear as mud. If csu wants a deb until 2040 it just needs to never redeem it.
It seems as I only have 30 shares of csu and $40,000 in debs I have to buy 370 warrants. Thus add to my cost base of 105.
On the surface it seems the best course of action is to sell my debs now for the cap gain ( rrif) as I prefer not to add to the cost basis .
I assume csu plans a redemption, why else go through with this exchange.
Thoughts ?
Read Answer Asked by Leon on August 17, 2023
Q: hello 5i:
more questions/clarification on the CSU warrants:
first, warrants do not HAVE to be exercised, and CSU would wind up with both Series 1 and Series 2 bonds, correct?
second, how do you see trading in the bonds affected? eg. as Series 2 can't be called before 2040, would this make them more valuable than Series 1? Or, if they can be called at any time, would this make them less valuable.
third, the interest rate for the bonds will still follow the same criteria for both Series 1 and Series 2?
fourth, using $10,000 (a round number that makes calculations easier), a holder would then receive 100 warrants? What about numbers that would involve parts of warrants eg. $111,100
thanks for straightening this out
Paul L
Read Answer Asked by Paul on August 16, 2023
Q: I note you last comment on ZRR (BMO Real Return Bond Index ETF) was in 2022. I note it has declined from the $19 range about a year ago down to $14 currently. What are your thoughts on it today as a place to invest for dividend income (RBC shows a dividend of 6.83%). I am interested in it for income as I am retired. How safe is the dividend and what will cause the price to appreciate again?
Read Answer Asked by Randy on August 14, 2023
Q: I am attempting to increase the bond exposure in my portfolio. Would you consider XHY as a good option or a combination of other bond ETF's, if so what others would you recommend?
Thanks
Kim
Read Answer Asked by kim on August 14, 2023
Q: hi,
can I get your opinion on the Aug. 9th Globe and Mail article by David Rosenberg and Bhawana Chhabra, "...It's time for investors to revisit their asset mix." And are you able to provide a few Canadian dollar ETF's to buy ( US treasury index? other? ), if you would in fact recommend that?
thanks, Chris
Read Answer Asked by chris on August 11, 2023
Q: I don't quite understand your answer to Rajeev's question on CSU debentures. Does this debenture exist and what is a rights issue ? The only debenture I can find listed on the TSE is CSU.DB which show a yield of 9.5% not 13.3% . So I imagine I'm looking at the wrong one. Could you give the correct symbol for the debenture in question ? And also explain and assess CSU.DB comparing it with the one Rajeev is interested in ? Which one would you prefer as part of the fixed income section of a portfolio ? Thanks .....
Read Answer Asked by Garth on August 05, 2023
Q: USHY iShares Broad USD High Yield Corporate Bond ETF (not in your data base).

Is this a good time to buy a bond fund like USHY? It seems to do the same thing as HYG , has much lower MER and a higher distribution (above learned after using the comparison tool at ETF.com). Does USHY have a higher risk than HYG? Is this a reasonably good time to buy such a fund?

Read Answer Asked by Adam on August 04, 2023
Q: Hi there,

Can you please suggest Canadian-listed ETFs for the bond portion of a long-term portfolio? I'm interested in diversification.

Thanks,

Chris
Read Answer Asked by Chris on August 01, 2023
Q: At the moment I have 19% of my portfolio in csu debentures
Cost 105, up about 32% from cost
As we see inflation numbers come down I expect the interest rate on the debs to shrink from the present 13%
On par to zero .
If the RATE of inflation change is from Jan 23. 6% to dec. 23 to 3% . The rate of change is 50%.
Thus the formula for next year would be 50-6.5 not to be lower then zero
Thus 0%
Am I correct
Thanks

From csu this year
This new interest rate is equal to the annual average percentage change in the “All-items Consumer Price Index” published by Statistics Canada during the 12 month period ending on December 31, 2022 plus 6.5% and will be reflected in the June 30, 2023 interest payment on the Debentures.
Read Answer Asked by Leon on July 27, 2023
Q: I am trying to decide whether I buy a 1 year GIC at 5.48% and/or a 2 year GIC at 5.44% vs a bond such as bns 1.95 01/10/2025 95.265 yielding 5.36617%.
Is there any compelling reason why I would chose a bond over a GIC if the latter has a higher interest rate?
Thx
Judy
Read Answer Asked by Alan on July 25, 2023
Q: Hello 5i
First, thank you for your excellent service and guidance! I am retired, looking for income and growth. Following are my questions.

1) What do you think of VCNS? Could you suggest an alternative. I presently have a half position in VCNS.
2) At this time would you still recommend a 4.5% position in ATZ?
3)I am down about 30% with MMM. Is there a better place for these funds?
4) I am down 11% with CLF. What has to happen( with interest etc.) to recoup this loss?

Thank you, Bill
Read Answer Asked by William on July 21, 2023
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