Investment Q&A

Q: Hi Team,
Could you please provide your take on the US Fed's recent interventions in the repurchase (repo) sector (overnight money loans). I understand this likely means the US Federal Reserve will resume buying more Treasury debt, expanding its balance sheet (a.k.a. quantitative easing). I don't fully appreciate what this means but am curious if you have any opinion on its significance to Canadian investors and their portfolios.
Many thanks, Michael

Q: My question involves whether to sell Xhy to buy more bkln making about 3% of my RRIF , as higher risk income. My understanding is that senior loans are less risky should the economy slow but still provide a good dividend. Is ther an alternative senior bond etf which you would prefer?
Thanks for your insight.

Q: Hi 5i
I purchased this etf for my mom. Can you tell me:
1) would 5i expect it to trade below its one year expected yield return from dec 31,2019 to dec 31 2020?
2) Mom’s capital position is currently underwater. What is 5is best guess for the closing price of each share dec 31, 2020?
3. I’m trying to assess the overall risk of the etf. How would this ETF do if a recession broke out in 2020?
4. Can you recommend a better replacement? Why is this better?
Thank you.

Q: For a bond etf this thing has gone up absurdly high this year to date. Do you expect this to continue? Would you recommend it?

Q: Please rate these as BUY; HOLD; or IGNORE. My purpose, of course, is market down turn protection.

Q: Hello 5i Team

Further to questions on parking cash, all the discount brokerages offer "High Interest Savings Account" mutual funds which are CDIC insured deposit accounts for the various subsidiaries of the bank.
Each of these is insured to $100k under CDIC, therefore you are able to segregate $400k under CDIC insurance in one brokerage account.
I am most familiar with RBC Direct Investing and TD Direct Investing, each offer 4 separate subsidiary companies with CDIC coverage. Other discount brokerages may only offer 1 option. A list is available on-line at:
https://www.finiki.org/wiki/High-interest_savings_account
The benefit of using these in your brokerage account are having cash available for other security purchases and the value is included for calculating available margin (loan value). The interest is paid monthly and can be reinvested automatically.
Thanks

Q: What are your thoughts of this etf for a hold in an rrsp as a fixed income component?

Q: Follow-up to Shirley's question about high interest savings accounts, best rates and Manitoba locales. I use rate hub to get best rates. Location only enters the picture if you are investing more than $100k. Manitoba offers unlimited coverage where elsewhere is covered by CDIC $100k. Once you select the institution you want to deal with, call them to get details on setting up an account and to get comfortable with their operation. Manitoba credit unions generally have regular office hours customer service (no weekends).

Q: Gentlemen, good morning.
I am searching a Canadian (global) actively managed broad market bond fund. Like US FBND.
Thanks Regards

Q: Hi Team,
99.3% of PSA's holdings are in cash. Is it then reasonable to assume that the maximum downside to this etf is 0.7%.
Cheers,

Q: In response to Ian's remarks about parking money, he mentioned the Manitoba locals. Could you elaborate on how one can invest in Manitoba?

Q: Good morning, I am noticing more recommendations lately for longer term bond ETFs i.e XLB and TLT. I have traditionally been using CBO, XBB along with some preferreds (regrettably) and a small amount of XHY. Should this old retiree consider any change in fixed income holdings? Thanks for your service.
Ted

Q: I would appreciate your opinion on this etf and would it be a good safe place to put cash for holding for future deployment in a market downturn? Do you have any other suggestions that are equal to or better than?

Q: I hold 6% of my total in HAB. It's my only bond exposure. Now there is the concern that a very high % of investment_grade bonds is BBB, which may cause trouble in recession.Do you think it'd be prudent to switch into CBO or VSB? Or anything you may suggest? Or am I reading too much into this?
Thank you
Jerry

Q: Whenever someone asks about parking money safely for a short period (ie up to a year), you always suggest GICs or Treasuries. There are many high interest savings accounts that pay more than these options and are CDIC backed up to $100k or, in the case of Manitoba locales, backed by the province with no limit. And they are completely flexible on term. You can move money in and out at will. Some names to look at are Motive Financial, Achieva and EQ Bank. To conclude, high interest savings should be part of your stock response to questions about parking money safely.

Q: Hi, what do you think of this security for its income potential and safety? Thanks!

Q: Hi team,
Current income allocation is as follows,
VSB 8.5%
XCB 7%
XHY 6%
and 5% cash

would like your opinion on this set up and allocation and if you would change something here.

Thanks for the great service.

Q: I have money parked in a GIC that will expire very soon. Needless to say that the current rate isn't good enough and I'm looking for a higher return without too much risk. As a replacement of my GIC, can you suggest 4 or 5 mutual funds (bond oriented or others - I am open !) that I can rely on for an "adequate" yield ? I am not looking for an homerun with bases loaded. I would be satisfied with a yield of 4-5 % approx. per year. I am not a fan of mutual funds showing yields that vary a lot year after year.

I really appreciate your excellent services !

Q: I hold about 12% of our fixed income in ZHY, the balance in ZAG. If we are heading into recession, default rates my rise but interest rates may fall. Does this holding make sense for a balanced (60/40) portfolio, retired investor living off the income. Capital preservation is important but volatility is expected and tolerable. Thanks for the fine service! Jim

Q: Can you explain how an investor can get a negative yield on a bond? For instance German 10 year bonds have a negative yield. Does that mean that there is a premium paid on the price say 102.00 and investor receives 100.00 at maturity. Does the investor receive semi-annual coupons like other bonds? Are the coupons more than 0.00 or are they negative also? Thank you.