Investment Q&A

Q: For a covered call ETF,the ROC will reduce progressively, year after year ,the initial book value,so what will happen then if you don't sell the ETF after many years : if the book value reaches zero,does this means that the book value could then become negative? If not,it will be interesting to keep the ETF for very long term..

Q: Hi There!

I and family own CDR shares on NEO of several US companies. I thought that, as they are fractional shares of the main shares they would mostly move in same direction of the parent shares. Lately I’ve noticed quite often even though the main shares are up on a day the CDRs are moving lower sometimes significantly. I can understand a few things that may cause this such as USD/CAD FX or perhaps it’s trading volume differences. Can you please explain this further?

Thank you!

Q: What criteria do you use in providing suggestions when you are asked for:
a) top dividend picks, or
b) top growth picks?

Thank you.

Q: I have noticed a few TSX listed companies mentioned positively in the 5i answers to questions that I haven't seen before. Nice to see some different names suggested as ones you like. In going back and looking at these companies, I see very good results in the latest earnings report. The stocks have, however, had a nice move up already, since those earnings reports were issued. It would have been great if we were made aware of these very good results soon after they were announced, so that we could not miss out on the subsequent run up in the share price.

So - I am wondering if 5i would consider issuing some kind of alert right after a company has reported quarterly earnings that are impressive, better than expected, and which are now looking like possible buy candidates that we could be looking at. A few of these a year could make a big difference. I try to do this occasionally in the forums section with Canadian companies that I follow that announce very strong results. No in depth analysis needed, just a "hey, have a look at this".

Q: With interest rates rising and bond yields now almost at levels worth looking at I want to start adding a few bonds to my portfolio. Obviously the easy thing to do would be to buy a few of your recommended bond ETFs but I would rather buy and hold individual bonds over bat for the average with an ETF. Can you recommend some good reading material on the subject of building a self managed bond portfolio. I understand the basics, looking for a slightly more advanced guide for a DIY investor.

Q: Schedule K1 Tax Form. I was looking at general commodity type funds and see that DBC and PDBC seem somewhat similar if looking at their commodity portfolios. Both deal with 14 traded commodities. Was using ETF.com as the information source.

DBC seems to have more trading volume and also a higher mgmt expense (0.87%).
PDBC has mgmt expense of 0.62% and assets under mgmt seem to be approx 6Bil. vs 2.53Bil with DBC

One difference noticed is that the structure of PDBC doesn't result in the creation of a Schedule K1 Tax Form while DBC does.

Please explain to me like I'm a 12 year old and that I have a "BIG RED L" on my ETF/ETN trading knowledge and trades vehicle.... what significance is the K1 thing and what sort of pitfalls do I need to be aware of if trades are being done in non-registered accounts? Does the K1 have the potential to add complexity and hassle at tax time?

Thanks for all that you folks at 5i are doing. Much appreciated.

Q: In a previous question you recommended ZSP be held in a RRSP so as to avoid the US withholding tax on dividends. Does the same tax rule apply to a RESP? If not & there is a US withholding tax on dividends, is it still worth holding ZSP in a RESP. Thanks … Cal

Q: Recently you answered my question for US dollars in my US RRIF account.Would it be better to transfer US funds into my Canadian RRIF to buy those stocks you suggested. Tks 5i

Q: Dear 5i,

I am pleased that you answered my last question, thank you. I would like to clarify something related to this question. According to the logic that a full position is 5%, an investment of this type, with 20 stocks at 5% weighting for each, cannot exceed 100 thousand dollars. 250 thousand dollars for example would make a weighting of 12.5% for each stock, which would be very high. Am I wrong? Is a basket of solid international companies like this one an exception.

Thanks

Q: Can you please help me understand what you mean when you say that investing in a US company on the NEO exchange here "offers you a currency hedge in addition to being able to buy smaller pieces of the underlying stock". (I am paraphrasing here). For example if you bought GOOG on the US exchange today and the US dollar stengthened, the value of those shares in CND funds would be higher. Similarly, if you bought GOOG on the NEO exchange and the US dollar strenghtened wouldn't the value of those shares also increase by the same amount in CND dollars otherwise there would be an arbitage opporuntity there?? If there is indeed a hedge I assume that is something you are paying for through fees? Does the hedge help you when the US dollar goes down and hurt you when the US dollar goes up? I am interested in understanding how that works,

Many Thanks
Scott

Q: Hi
I am wondering where i can find the companies that you added to recently
Thanks fa a great service

Q: Hi 5i Team - I sometimes hear about the amount of money waiting on the sidelines for possible investments in the equities markets. Do you have an idea of what this might be in the U.S. or Canada or even globally. Also would you consider it a significant amount. Thanks.

Q: I generally look at a company's PE when assessing it. I think the S & P TSX composite is around 16 or so. But each sector within the composite has a different average PE. For example, the Financial sector is lower as is the energy sector, while technology is much higher. Is there a publication you are aware of the breaks down the PE’s for the various sectors within TSX or S&P?
Thank you.
Dave

Q: Is there anywhere on this website that we can see all the questions that we have asked ourselves? There used to be a few years ago.
Thanks

Q: Hi team,

I suggested 2 years ago a section or category on your questions page to help investors to understand the meaning and importance of key terms such as P/E, P/B, ROE, ect...Here is the question raised then:

What is exactly the meaning of "Capped" for an ETF.

May I suggest a category in your list of questions which would be 'vocabulary" or "meaning of..." for quick reference for unexperienced investors like me. It could avoid repetitive questions. I knew at some point what "capped" meant, but I forgot....

Many thanks,

Jacques IDS

Asked by Jacques on November 02, 2020

Any chance to see it appear this year ? Or, alternatively, what would be a good source to find the meaning and significance of stock market terms ?

Gratefully,

Jacques IDS

Q: Some large companies such Amazon trade in Canada as depository receipts. Can you elaborate on this product advantages or disadvantages and would you recommend its use.
Best Regards, Harold

Q: At the end of each year I gauge my portfolio performance against a basket of indexes. Finding accurate total return performance figures for certain indexes is always a challenge. Could you tell me what the 2022 total return (before taxes) was for the following:
S&P TSX Composite
MSCI ACWI ex USA Index
FTSE TMX Can Bond Index

Q: My broker has suggested I look into National Banks auto callable note securities (mature monitered Barrier) linked to the Solactive Canada Bank 40 AR index. Issuance date is Monday January 13. Its a 5 year note callable semi annually. Returns seem to be very good. I have absolutely no experience with callable notes and would like your opinion on this note. I am told that if the shares of banks go up in the next 5 years it is a good investment.

Wayne

Q: Can you please provide various metrics where the sp500 is still over valued?

Q: Thanks for all your help!! If you need US funds is there any downside to moving stocks that trade in Canadian and US markets to US markets and receive the dividends in US funds?