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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: I have not made use of DRIPS in the past but am considering the conversion for some stocks like banks. I have been appreciative of the extra cash for more buying in the past but locking in the dividends may be a better way to go. Thoughts?
Read Answer Asked by Dennis on January 16, 2018
Q: My question is about Purpose energy credit opportunities income fund PCF.UN, is it converting to a ETF. If it is when? Would this be a suitable buy now before the conversion in a TFSA for a 79 year older would you wait to buy at all.Your opinion of this as a fund and as a ETF would be appreciated. This would be in a managed account with a fee of 1% plus the fund fee.
M
Read Answer Asked by M J on January 16, 2018
Q: Constellation Software announced this morning of a nice acquisition of Acceo Solutions for a price of $250 mln.
Q1: Seems like a good size acquisition, after some time. With annual proforma revenue of $116 mln, how significant is this transaction ?
Q2 : What is your understanding of the proposed financing ?
" Constellation expects to finance the Acceo acquisition on a stand-alone basis. This is a continuation of Constellation’s use of leveraged capital structures to compete more effectively for larger vertical market software businesses. "
Thanks
Read Answer Asked by rajeev on January 16, 2018
Q: As a follow-up to your Jan 12 reply to Elmer: I bought OTEX a couple of years back partly based on a very low PE in the 6-7 range (Thompson-Reuters stock info in National Post). Same source now has PE at 80. Your response says: the stock is cheap at 13X earnings. I'm confused. Could you explain? Should investors ignore the Thomp-Reuters numbers, or how can they be used?
Thnx in advance.
Read Answer Asked by John on January 16, 2018
Q: Hello 5i team,
S&P Dow Jones Indices and MSCI recently announced revisions to the Global Industry Classification Standard (GICS®) structure for 2018. I think it would make a great topic for a 5i blog. In the meantime, I have a some questions: (1) does this announcement confirms that we should not always follow blindly industrial classification? (2) the classification is not always up to date, especially in developing industries (internet, telecom, media, communication) or when companies are transitioning activities? (3) Investors should allow themselves to split classification 50%/50% for some companies? (4) Could you list some companies that you think are currently "misclassified" by index providers (SHOP communications?) including companies either under coverage or in 5i Research portfolios or that will be reclassified?; (5) Would you agree that this announcement confirms that long term investors should not care that much about short term sector weighting fluctuations (rounding to the closest 5% is good enough) and should focus on selecting the best investments (stocks) whatever the sector, while just avoiding too high sector concentration, instead of doing mandatory diversification among all sectors in less good companies (for exemple recently : energy)? My main point is: many investors will change the composition of their portfolio (trade) following S&P and MSCI decision while their portfolio exposition (economic drivers) will not have change. Reading most 5i Research questions every day, I see many questions about sector allocation. I thought my questions would help some clients. Any other thoughts?
Thank you for your collaboration, Eric
Read Answer Asked by Eric on January 16, 2018
Q: I am looking for an ETF for RESPs for my three grandchildren. The eldest is 8 yrs old, so the money will not be needed for some time. I would like conservative growth, if there is such a thing. I am thinking of XIC or CDZ. Or maybe you could suggest something else. The amounts are about $5K so one ETF is probably best, for now. Thanks
Read Answer Asked by Gordon on January 16, 2018
Q: Happy Monday !
I am looking to play a little defense, with the current high valuations of stock market, without getting out entirely. Thinking about consumer staples, in an etf basket. Which do you prefer, better valuation, liquidity, other metrics ?
KXI.. a global etf, XLP ...U.S stocks, or XST ...Cdn stocks, ..(not my fav)
Read Answer Asked by Bernie on January 16, 2018
Q: Can you suggest a good China ETF, preferably in tech, that is in CAD $. I am concerned about the US $ going down, and think I might be better off buying in CAD. Does this seem logical to you, or should I take a chance and buy CQQQ, KWEB or QQQC?

Thanks again for your insights!

ELizabeth
Read Answer Asked by Elizabeth on January 16, 2018
Q: Hello,

I have been holding TDB902 Mutual Fund which tracks the S&P500 over the last few years. The approx return for TDB902 from Jan 2014 to Jan 2018 is 77%, XSP has been 52% and VFV 78%. However, the one year return for TDB902 has been 16.21%, VFV 16.42%, but XSP has been 22%. XSP is CAD hedged, and I'm looking for the best investment to track the S&P 500. Is it better to have XSP/CAD Hedged ETF? My understanding is that on average CAD to USD has been approx .80 (outside of the few years when CAD was on par with the USD), I think there may be some fluctuation between .75-.81, but will stay around .80 (or decline). Which ETF would have the best returns and track the S&P500 accurately, and should I consider a CAD hedged ETF?
Read Answer Asked by Neeraj on January 16, 2018
Q: I have a question about A&W Revenue Royalties. The early warning report dated Jan 05 seems to boil down to A&W food services increasing (or wanting to increase) its ownership stake in A&W Revenue Royalties Income Fund from 21.1% to something in the vicinity of 24.7%. I cannot see this as anything but good news as it is essentially insiders buying significantly into the fund. My question is, is this just that and would you consider the December buy levels (slightly above the current price) a sign of confidence toward the stock price? Or, is there something else potentially going on here? Thank-you.
Read Answer Asked by Alex on January 16, 2018
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