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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: Dear 5i,

Can I please get your opinion regarding these 3 Canadian Aggregate Bond ETF's.
MKB and HAD have MER's approx. 4 times higher than the passive XBB ETF. It looks like the overall Total Return performance is better with MKB and HAD but, only by about 0.5 to 1%.
1. Do you think it is worth paying the extra fees for MKB and HAD?
2. If yes, which one would you choose between MKB and HAD?
3. With interest rates already very low does it make any sense to purchase any Canadian aggregate bonds?

thanks
Read Answer Asked by Ian on June 17, 2020
Q: Hi, I owned the 5.25% Debentures (and stock) ahead of the COVID-crash, but bought more of both in the pit of the crash. I get that they are servicing a lot of debt, but I also felt that they were perhaps being punished for being an airline, without consideration of their essential service in most of their flying markets, and their largest input cost is fuel, which mitigates some lost revenue.
The Debentures have not recovered nearly as well as the stock. I'm OK holding on to the debentures, as they are less than 2% of my RSP, but would appreciate your perspective.
Read Answer Asked by Darren on June 11, 2020
Q: This fund is recommended by my broker for my RIF/TFSA. Would appreciate your opinion on the pros and cons of investing in this fund. it looks like that this fund provides trailer fee to the broker, would that be an incentive for his recommendation?
The fund may have performed well due to the drastic fall in interest rate. What effect of higher interest rate on the performance of this fund? Do you forecast that interest rate may go higher when the situation of the virus subsides?

Thanks
Read Answer Asked by Saad on June 09, 2020
Q: HI TEAM
XHY IS APPROX 10% AND THE OTHER 3 ARE 30% EACH OF THE BOND PORTION OF MY PORTFOLIO, WHER WOULD YOU ADD FUNDS AS I NEED TO TOP UP MY BONDS
Read Answer Asked by Peter on June 04, 2020
Q: What do you think of this fund? Wanting to put some of my elderly parent's cash in USD. Can you put Canadian dollars into this, or do you need to convert it first (trying to avoid transaction fees)? Also, as I read about it, it seems to have a fair number of Canadian holdings. Does that make sense? Thanks.
Read Answer Asked by Donald on May 20, 2020
Q: Investors seem very nervous about Wells Fargo. Just today (May 14th) someone on this site expressed some trepidation. What’s your opinion about buying Wells Fargo bonds at this time? One is for a three year hold, the other for six years. If Wells merged with another bank, how would that affect those bonds? Some are speculating that Wells could be another Lehman waiting to happen. Does that have any merit? Are their bonds safe? Thanks.
Read Answer Asked by Brian on May 15, 2020
Q: For an individual bond that I hold to maturity, I would consider the yield to maturity as being more relevant than the current yield. But when it comes to a bond etf what is the relevant metric? Possibly the average current yield? As presumably the underlying bonds are not held to maturity as they would be bought and sold to keep the etf's duration in line with its target.
Read Answer Asked by William on May 14, 2020
Q: Hi,
I'm trying to create a well balanced bond fund for that portion of my portfolio and have come up with this: HFR-T, CBO-T, CLF-T, TLT, XBB-T, CVD-T, SHY, FLOT, IVOL, BNDX, VSG-T
I guess I should have something that will generate monthly income as well? If I am overdoing this, please let me know...it seems like a lot of holdings. Is there a better way? A mutual fund?
Thanks.
Read Answer Asked by Gregory on May 13, 2020
Q: Good Morning Peter & team,

Once only thought of as a European/Asia market phenomenon, There is talk we could see negative interest rates in Canada in the next year. Technicals for the big banks are all similar - the beginning of a recovery last week in March as things started turning around then, plateau. Still higher highs and higher lows but not the same recovery as the Markets in general.

I own TD & BNS. I have read your comments on both. Do you feel these are worth holding? Do you think Negative rates could happen? And if so what effect could we expect on the big banks?

Thanks for all you do.

gm
Read Answer Asked by Gord on May 13, 2020
Q: In a recent question, Shirley asked about high savings accounts. She should look at Motif Financial, which is a division of Canadian Western Bank. Their current interest rate is 2.2%. Hope this helps.
Read Answer Asked by Jerry on May 12, 2020
Q: I'm trying to make decisions for my retired mother's taxable account.

In the current environment, do preferred shares make more sense than bonds or other fixed income strategies? If so, can you recommend a few of the best preferred share funds (or would an ETF like CPD or ZPR be a wiser option)?
Read Answer Asked by Kevin on May 12, 2020
Q: Some people have been inquiring as to where to park cash. Do you have any information about the Manitoba Credit Unions? I have recently inquired and have found that deposits in a high interest savings account are guaranteed under the "Deposit Guarantee Corporation of Manitoba" for an unlimited amount, paying 2%. Has anyone used one of them and did you like them? I also put this out in the forums. I would like to hear of someone that has opened an annount, and if they were satisfied.
Thanks for any help
Read Answer Asked by Shirley on May 12, 2020
Q: I have decided to go to a cash position for next while. Only stock I kept was SHOP and one I should also have kept KXS. My year to go away in May and come back another day. It has been quite a ride this past 7 weeks but I am back to where I started my year. Where would you recommend parking cash for the next 3 to 5 months.
As always we are grateful for your service.
Regards,
Read Answer Asked by Loretta on May 07, 2020
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