Investment Q&A

Q: About 25% of my portfolio is in cash, enough for 5 years of cash needs. The problem is that it earns only 0.2%. Now I am thinking of putting this cash in 5 or more high quality Bond ETFs. Is this a right move? If so, could you give few names? Thanks.

Q: I’m 71 years old. As I get older I’ve tried to simplify my portfolio, going from about 50 stocks years ago, to my current portfolio of about 16 stocks, 3 ETFs and 15% cash.
I am a subscriber to your Portfolio Tracking and Analysis service and I’m told I need to make changes to reach a suggested asset allocation and portfolio diversification. Right now I’m tech, utilities and financial services heavy.

Here’s what I’d like to do:
The following set up gives me an allocation of 70% equities, 20 % bonds and 7% cash. I’m comfortable with this and have gone through many 20 and 30% corrections in the past 30 years without too much despair.

In my Canadian cash account I’d have CDZ, FTS, AQN.
Locked in RSP (LIRA) I would have AAPL, ZSP, ZEM.
Unlocked RIF I ‘d have CLF, ZAG.
TFSA would have QQQ, ZEM, ZDI, CSU, TOI, SIS.
I’d like cash around 8% of portfolio.

I’m wondering if I have my portfolio diversification covered and if the right stocks or ETFs are in the appropriate accounts for best tax efficiencies?
Your input would really be helpful.
Thanks
Frank

Q: Thank you for the reply to my recent question. Unfortunately the question pertained to the 5i balanced etf portfolio not the balanced equity portfolio. May I please have to top five etf positions to add new money at this time.

Q: I'm helping a friend set up a "couch potato portfolio". I noticed a while back that you commented on such a portfolio. I am suggesting the following to my friend. What do you think? Is there any of the ETFs that you would swap out? And why?

XIU S&P/TSX60 total return for Canada 25%
ZSP BMO S&P 500 Index ETF for USA 25%
XEF ishares Core MSCI EAFE for Europe/Japan 25%
ZEM BMO MSCI Emerging Markets Index ETF for emerging markets 5%
XGD iShares S&P/TSX Global Gold for gold exposure 5%
ZAG BMO Aggregate Bond ETF 15%

It appears that both ZSP and XEF offer USD versions. What are the pros and cons?
Thanks

Q: I had a portfolio review many years ago when you did them individually, personally by human! At the time your suggestions were right on and cleaned up my ETF's. Now I have over ten and according to your metrics it should not be so. Given those above, is there anything that is not required? I am up 25%- 150% on all of them. I am happy with all of them. I have a balanced portfolio in all 11 sectors with 44 stocks all doing quite nicely thank you. Following the income portfolio with some of my own additions from 15 years ago. I do not see any major conflicts.I am s a buy and hold dividend investor with some growth ( lightspeed, Leon's).
Thank you for your million dollar service!
Stanley

Q: With interest rates probably going up in the next year or two, what ETF bond funds do you suggest would be suitable investment for this type of environment? Thank's.
Ronald

Q: I see the weighted average duration of ZAG is 7.93 years. Does that mean for every 1 % increase in interest rates the price will fall by 7.93%. If so I feel I should get out of ZAG with anticipation of increasing interest rates.

Q: Morning 5i Team, in order to add some torque to the fixed income portion of an RRSP, what do you think of the combination of these two @50% each? Better alternatives?
Thanks, Lavern

Q: I need to add some bond ETFs to my portfolio. Could you give three US dollar and
three Canadian dollar funds that you prefer .

Q: Good morning team,
A few years ago I purchased ZAG as my bond portfolio for a long-term hold. It did will rising to $17.15, but as interest rates rose and it declined to my purchase price of $16.40, and given that I am over 70 years old, I sold out to preserve capital. I am looking for an alternative, safer place to put the fixed income portion of my portfolio. GICs and money market funds offer weak returns. I am looking at ZST (and ZUS for $US). Do you think these are a good places to go for safety of capital and rising return assuming interest rates continue to go up?

Q: Hello, How come I do not see you recommend ZAG for bond exposure? I saw a recent question where you recommended ZCS for bond exposure. When I look at a 10 year chart, ZAG seems to have outperformed ZCS. Is it because of rising bond yields that you recommend holding ZCS as you predict better performance over ZAG?

Thank you!

Q: Hello,
The share price of ZAG has been declining for the past six months. The Bank of Canada interest rate is stable and inflation is low. Is there something else that could explain this?
Thank you.

Q: Thanks for your previous response confirming these etfs cover major asset classes and geographies for an RSP with 5 years to retirement. Could you please suggest a couple of etf alternatives that could be added to provide a little more torque with a 5 year timeframe. A brief explanation for each would be appreciated. Thanks.

Q: These ETFs make up my main bond holdings in an RSP. All have done OK, but are starting to slip a little bit. I also hold XTR, which has a high bond component, and noticed that they recently reduced the distribution. In an increasing rate environment, how would you rank these 3 bond ETFs in terms of (1) maintaining share price; and, (2) maintaining distributions?
Thank-you

Q: Are the following ETFs sufficiently diversified to form a balanced-growth portfolio of $100K - ZAG 25%, QEF 15%, WXM 20% and XAW 40 %. If not, what would you recommend?

Q: If I buy:
ZWC ((BMO CDN HIGH DIV COV ETF) for Canadian exposure and income,
ZWS (BMO US HIGH DIV COVER ETF) for US exposure and income, and
ZWE (BMO EUROPE HI DIV COVER CALL HEDGED CAD) for European exposure and income,

that will give me about 7%+ income and exposure to about 120 very decent world wide companies. As a retiree, would I need to do anything else?

Q: Hello 5i,
I have $21,000 in XSB and the same in XLB. Should I sell these and just get ZAG or does it really matter and stay as is?

Q: I have transferred my RRIF account from a broker and I plan to self-mange that account. The cash balance as of today is $290,000. I'm 88 years old so I need strong cash flow and/or capital gains to meet the required annual distribution. Please provide a list of stocks and ETFs that 5i would recommend for that purpose. Thanks for your valued assistance.

Q: Fixed Income portion of portfolio is 40% and some deposits came due so need to deploy that cash into fixed income. Thinking of putting 25% of the 40% FI into these two ETFs. I would appreciate your thoughts on this plan please. Alternatives are welcome. Thanks again.

Q: Having received the above funds shares from a bequest, I am contemplating on selling and replacing the above funds for ETF's which would be complimentary with diversification, possibly reducing fees and improve performance.

Garry