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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: Looking at these two ETF's what is the major difference besides price? I see the MER is higher on XWD not sure which is bigger and I assume XWD has canada in it as well unlike the XAW. Can you give me your opinion on this and which you think is better long term buy and forget.
Thanks
Read Answer Asked by Kolbi on April 27, 2020
Q: Good afternoon. Buy and hold investor. Currently hold 20% XUU, 15% VIU, 5% VEE in portfolio as my non-Canadian equity holdings. What would the pros and cons be of selling them and putting it all in to XAW, and would you recommend such a move? I only re-balance once a year as it is. Thanks for your reply.
Read Answer Asked by Jeff on April 23, 2020
Q: Hi Peter, VCN and XAW are in one portfolio, VXC is in another. Would you add to these or is there a better choice considering the Canadian dollar or Covid? Thanks.
Read Answer Asked by Robert on March 26, 2020
Q: Looking for a 2nd opinion.
My wife has stayed out of the stock market for quite some time. I think now's a great time to get in.
We've got about $75K in her RRSP/LIRA My strategy for her is as follows:
XBB 20%
VCN 15%
XUS 40%
XAW 25%
The plan is to buy in in installments over the next 3 months.
Are there alternate ETFs that may be better than the allocation above?
Does this strike you as reasonable ?
Read Answer Asked by Michael on March 24, 2020
Q: Hi 5i,
I am not 100% clear on stock and ETF's allocations for investment plans. Take as many points as needed to answer the questions below. I apologize in advance for the length of the question.

As a Canadian investing through a Canadian site (RBC in this case), split into CDN and US sections (moved CDN funds to USD and paid the exchange), which stocks and ETF's should be allocated to RRSP (CDN or US sections), TFSA, & Non-Registered accounts?

As an example, an RBC RRSP account is split into CAD and USD segments. If I purchase VWO in USD on the US segment instead of VEE on the CDN segment do I retain the 15% withholding tax? If I purchase VWO in CDN funds on the CDN side of the RRSP, what happens to the 15% withholding tax?

Is there a tax difference when filing a CRA 1135 form. e.g if VWO or VEE are 100+k CDN value: VWO on the USD segment or VEE on the CDN segment or VWO on the CDN segment.

If a US stock has a dividend, should this ever be purchased on the CDN side of the RRSP or in a TFSA? .. e.g. CRM with a small dividend or AMGN with a larger dividend

Can you please assign the best allocations (RRSP, TFSA, Non-Registered) to examples a the bottom of the question.
e.g. Non-dividend Growth US stocks (Googl, AMZN): TFSA, RRSP
This tells me that AMZN is best in the TFSA for growth, and in an RRSP purchased in CDN or US funds is the same effect other than currency at the time of purchase.
If a stock or ETF should be in CDN or US sections can you note that as well? e.g. RRSP(CDN or US).
It is a lot to ask so limited examples below will hopefully reduce the effort.

5i recommendations
Non-dividend Growth US stocks (e.g. Googl, AMZN):
US small Dividend Growth (e.g. IWO):
US Foreign ETF (e.g. VWO):
CDN ETF with US stocks and other int'l stocks (e.g. VEE):
CDN High Dividend (e.g. CDN Utilities/Reits/ETF's):
US High Dividend (e.g. US Utilities/Reits/Medical/ETF's)
All World ETF (VT):
All World ETF (XAW):

I very much appreciate your service and time to answer questions.

Jerry
Read Answer Asked by Jerry on March 16, 2020
Q: Hi gang, can you please give me 4-5 large ETF high volume and market cap in Canada.? Thanks.
Alnoor
Read Answer Asked by Alnoor on January 16, 2020
Q: I'm 21 years old and am planning on making a TFSA portfolio of Canaidan companies (Mostly Blue-chip dividend paying stocks, IE, Banks, Telcos etc....) to buy and hold forever. I'm also planning on adding SHOPIFY in my TFSA and placing BABA in my RRSP. I was thinking XAW in RRSP as well top get american/international exposure, Just wondering your thoughts on this and any advice would be great. Also do you think it's a good idea to invest now or wait for a market correction or just avergae in over time in all of these companies.
Read Answer Asked by Johnny on November 14, 2019
Q: I'm looking for a world-wide ETF to invest in long-term, without exposure to Canada. I came across XAW. It seemed like a wise choice. I like it because it's world-wide, but doesn't include Canada, and has no bond holdings.

I am currently saving for a downpayment and have about 30% of my portfolio in XBB (which will be used for the downpayment). Plus a bunch of money invested in Canada already.
1. What do you think about XAW?
2. Any other ETFs in a similar space as XAW I should consider?

Thanks!
Read Answer Asked by Michael on September 09, 2019
Q: Hello, Sent a question earlier and your reply is as follows;

PA recommends to reduce my technology exposure which is at 38%. Only problem is I am unsure which tickers to get rid of, like them all.

In my RRSP; OTEX at 4% and XAW at 21% not a direct tech exposure but does hold plenty of tech, just not sure how much.

LIRA: SHOP at 6.5%( recently chopped it from 9% to 5%), LSPD 5%, KXS 3%, QST 2.2%,

TSFA: CUSat 5%

Which one would you pull the plug on?

Tks

Asked by Rino on August 22, 2019
5i Research Answer:

XAW is currently about 22% technology. We like all the names here, and there is nothing stopping you from selling some of each if you want to lower exposure. XAW at 21% is a large position and could also be moved to 15% or so in our view. It has not performed so well either. If you want to sell just one we would lean to QST as the smallest and riskiest.

I should have also mentioned that PA also suggest to reduce my canadian exposure which is above 60%. That is the reason why my XAW exposure is at 21%. Having said that if I were to sell roughly 6% of XAW, can you suggest another non canadian etf to invest in? Seeing that XAW covers basically everything for my international exposure.

Thanks again!
Read Answer Asked by Rino on August 23, 2019
Q: Hi team,

PA recommends to reduce my technology exposure which is at 38%. Only problem is I am unsure which tickers to get rid of, like them all.

In my RRSP; OTEX at 4% and XAW at 21% not a direct tech exposure but does hold plenty of tech, just not sure how much.

LIRA: SHOP at 6.5%( recently chopped it from 9% to 5%), LSPD 5%, KXS 3%, QST 2.2%,

TSFA: CUSat 5%

Which one would you pull the plug on?

Tks

Read Answer Asked by Rino on August 22, 2019
Q: 2 questions - please deduct as many points as needed.
Q1 - according to Portfolio Analytics, I need to increase my fixed income allocation by $90k. I own 4% positions in XBB, ZIC & PMO005 and 2.6% in CPD. Would you recommend adding to one of these or would you suggest adding another ETF?
Q2 - I need to add $125k to International exposure. Current international holdings include XAW, XMI & XEC at just over 2%. Should i add to anyone of these or add something else?
Read Answer Asked by Rosemin on May 21, 2019
Q: Hi 5i
I am completely new to the world of ETFs but, according to Portfolio Analytics (and I did know it was a good idea before being told, really I did) I need to add US and International exposure to my portfolio. I think the only reasonable way for me to do that given I don't/can't follow non-Canadian equity markets is through ETFs.
I would like to place 55K in US ETFs and 45K in International ETFs and this will, for now, comprise the entire non-Canadian portion of my portfolio.
I am not adverse to some above average risk and while I'd like income I'm more interested in growth.
In researching where to place this money I've concluded that I might not have the candle power necessary to make rational decisions about ETFs because of the distinct possibility of purchasing ETFs that hold the same or similar underlying equities from the same or similar geographies in the same or similar sectors (assuming I'm not just concentrating on discrete sectors). Left to my own devices I feel that I could very possibly purchase a little bundle of different ETFs that are all essentially but unintentionally quite similar.
My question is two-fold:
1. Is my concern about concentration valid or have I misinterpreted the lay of the land, and
2. Could you suggest 4 or 5 US ETFs and a similar # of International ETFs that I can consider and that won't have the type of overlap I'm worried about.
I realize this is a broad and general (and perhaps rambling) question - so please deduct as many credits as you think is warranted.
Thanks a lot!
Peter
Read Answer Asked by Peter on April 25, 2019
Q: Hello,

Portfolio analytics is suggestion that I go 75/25 equity to income and from the 75% equity to allocate 35% into US, 35% in International and 30% into CND. Suggested ETFs for US and International are VUN, VIU and VEE. How would you view instead of holding three funds I go with one, either VXC or XAW? Or do you feel that is too much into just one ETF Also, which one is better suited for an RRSP account.

Thank you.
Read Answer Asked by Rino on April 09, 2019
Q: I need raise money from my cash account.
Current dividends have been paid.
What would you sell first, second, third,4th, etc.?

Thank you ian
Read Answer Asked by ian on March 22, 2019
Q: Hi 5i,

A portfolio construction question. I've selected a mix of XTR (36%), XSB (7%), CDZ (17%), XAW (19%), and then a mix of laddered GIC options (17%) and a small cash holding (4%). This is for a family member's portfolio, retired, needing income, security, and modest growth (in that order).

This ends with an allocation of approx. 55% equities and 45% fixed income/cash, and 69% Canada, 22% USA, and 9% Global.

This mix also generates distributions/dividends almost dead on 4%/year, so following the 4% withdrawal rule more or less allows for not needing to sell anything to cover cash flow needs.

Wondering if you could comment on the ETF selections and overall structure with the understanding of course that its always a highly personal decision. More just want to know if you have better ETF or security selections for this scenario...

Thank you so much!
Ryan
Read Answer Asked by Ryan on February 19, 2019
Q: Trying to get a bit more geographic diversification in a TFSA account that is, at present, all Canadian equities. Would you suggest something like HXS for US diversification with the swap arrangement to limit tax implications? Or would something like VGRO make more sense with greater geographic diversification and a little fixed income?

Thanks for the great service,

Doug
Read Answer Asked by Doug on February 13, 2019