Investment Q&A

Q: In reflecting on the next direction to place some funds I looked at the performance of the Russel 2000 fund in your growth portfolio. Then looked at some alternatives in the Vanguard family of US based small cap and Russel ETFs. Going more mid or small cap seems appealing but where would your preference lies or is it in the current ETF you hold in the growth portfolio?

Q: This is a follow up to a previous question about USD ETFs where you suggested IWO for the long term small cap portion of a USD TFSA or USD RRSP. I'm curious why you suggest IWO in particular, as it seems to be a recurring suggestion. I'm partiuclarly interested in a comparison of IWO to IWM, VTWO, VBK and SLYG, how you would distinguish them, and in what situations these others might be preferred over IWO. These others all seem to have lower fees and slightly different composition features. Please take as many question credits as needed - thanks as always for helpful answers.

Q: I presently have QQQ and VIG in a USD TFSA, in roughly equal weightings. I'm looking to add one or possibly two more USD ETFs to this TFSA account to diversify a bit more, resulting in rougly 33% or 25% equal weightings depending on whether I end up with three or four in total. If adding just one I would be willing to sacrifice some growth opportunity in favour of some stability and yield in the roughly 3-4% (+/-) range, if possible. If adding two I would prefer something just as described, plus something growth oriented with little or no yield. I'm hoping to minimize duplication or overlap with the existing QQQ and VIG combination, to the extent possible. These would all be securities purchased in USD for long term term holds, and I am not too concerned about the withholding tax on US dividends in a USD TFSA. Can you offer some suggestions? Thanks.

Q: Good morning 5i,

Aside from industrials and general tech. What is a thematic ETF you'd suggest for growth right now? Encompassing maybe a favourite stock or 2.

Examples being FINX, SMH, BOTZ, QQQJ.

Looking for the theme and suggested ETF.

Thanks as always for the tremendous service.

Q: In my grandchildren RESP I currently own IWO and VRO. I would like to add a third ETF, which would be better VGG or ZQQ? Money not needed for 12 years. At what $ amount would you start to invest in individual stocks?
Thanks

Q: I am looking for your opinion on tech weighting. My USA exposure is currently VIG, SPY and IWO. ( 40-40-20%). This puts me a bit underweight tech relative to the overall USA market ( and globally in my portfolio). I've had in my "plan" to shift a small amount of spy and vig to xqq to get my tech allocation up from low teens to high teens.

So long way to ask: Is now a good time to add XQQ or has the run been too good to keep going.

Q: FTEC now makes up almost 12% of my portfolio and wondering if you would recommend trimming a bit and investing in an ETF like ARKK? I also hold ZSP which is about 10% of my portfolio now and maybe there is a bit of overlap between the two ETFs? Looking for growth in my RRSP, 10+ years and I don't need any dividends.

Do you think there is still some upside left to an industrial ETF like VIS? And do you have any other sector ETF recommendations that will complement FTEC and ZSP?

Thanks in advance. Please deduct credits as required.
KD

Q: What are your top 10 ETF’s to hold forever?
Would you buy them on the US or Canadian markets if available. I know some of the US listed ETF’s are more liquid. Thanks

Q: My 22 year old daughter has $7G to invest. She has dual citizenship with the US and has been told that she will be taxed on TFSA gains. Do you have any recommendations for her based on this?

Also, could you recommend some ETF’s for her?

Thank you so much.

Q: I have the time and interest to invest in individual stocks and have benefited greatly from your advice, My 28 year old son is looking to me for investment advice and I was hoping that you could help me. He is young with a long investment horizon so he is not interested in any bond or fixed income components and is comfortable with a portfolio holding a diversified mix of 100% stocks in various geographies. He wants to control his own portfolio but does not have the time to research and stay on top of individual stocks and is leaning towards an ETF portfolio. I am not well versed in this area and was hoping you could provide some guidance.

He is looking at XEQT and VEQT as possible one stop solutions. There are some minor differences between the two, but overall they appear very similar. XEQT has a MER of 0.2% and VEQT has a MER of 0.25%, VEQT holds more stocks than XEQT and XEQT is weighted a bit more towards US stocks and a bit less towards CAD stocks compared to VEQT. Would you recommend one over the other, or hold both?

Instead of buying one of these he is also considering holding a two (or more) ETF portfolio using VCN and XAW ETFs. VCN tracks the Canadian market, XAW tracks the global market excluding Canada. A portfolio of 25% VCN and 75% XAW would replicate XEQT/VEQT very closely, but would have a weighted average MER of about .18%. The trade off is that this one would need to be rebalanced, whereas with XEQT/VEQT all rebalancing is done automatically. Would a 25%VCN/75% XAW be preferable to XEQT/VEQT?

If it was you at 28, would you do either of the above or would you prefer a portfolio of other ETFs and if so, what would those be?

Many thanks

Scott

Q: Hi Peter, Ryan, and Team,

The most recent question about XMD was on Feb. 23.

For a combined portfolio that is skewed somewhat more heavily to larger-cap stocks, could XMD make a good addition? From the iShares website: "Targeted exposure to mid-cap and small-cap Canadian equities". (I can trade this ETF commission-free.) XMD holds 175 stocks, many of which are favoured by 5i, but of course it also holds some that have fallen out of favour. Please suggest alternative Canadian and US ETFs that you may consider "better" but have the same overall goals of XMD.

As always, your advice is important.

Q: Can you recommend a sort of Rip van Winkle portfolio for an 84 year old lady who just sold her house? We're talking in the neighbourhood of $400,000. She has little need for the money right now and is not worried much about volatility. She has an pension which helps too cover the need for bonds.

Q: Hi 5i,

For a new position and a 5+ year hold do you currently prefer IWM over IWO? Or could you recommend another ETF that would be good small cap exposure. Would IWO be a bit more challenged in a higher inflation environment?

Q: Hello,

Which aggressive growth ETF (or a set of ETFs), would you recommend for a long (e.g. 14+ years hold) in a RESP account?

Thank you

Q: My daugter is 22 years old, finishing her last year of university. She has some extra cash ($2500) and has just opened a TFSA. What stock or ETF would you buy today? Can you give a few options and put them in order of risk?
Thank you for your great service.

Q: We have a small amount of investable dollars available that was gifted to us when our two children were born. They both already have RESPs and those are maxed out. Our own TFSAs are maxed out, and the RRSPs are nearly as well - but this is intended to be for them when they get older, not us. Any advice you can give other than model something after the growth portfolio and wait? Time is on our side. 10+ year outlook before we might try and access it.

Q: Hi 5i, I believe in diversification and sector capital allocation as the way to help protect yourself over the long term and am currently building out a well diversified portfolio with dividends in mind. With that said my Canadian investments are good (thank you 5i) In the US I am missing exposure to small and midcap companies can you recommend a ETF or mutual fund while keeping dividends in mind currency doesn't matter to me as i have both Canadian and US accounts. Also for the rest of the world I have VXUS ETF can you help me with exposure there.
Many thanks!

Q: My 31 year old daughter has $50,000 cash in her US TFSA account. What investments would you recommend for a mid to long term hold.

Thanks

Q: Modest amount of funds in trust for teenagers. Plan to sell Alteryx at small loss. What would you suggest for USD purchase please? I was looking @ VTRS. Not keen on debt levels but will it provide downside protection in this volatile market? Time horizon 1.5 years. Could you also please identify growth oriented names. VEEV already owned. Also ETF ideas to look @ please. Please deduct question credits as appropriate.

Q: I am looking to invest in an ETF for a period of 5 to 10 years and have a medium to high risk tolerance. Can you suggest 5 to 10 ETFs that should be considered? Thank you very much