Investment Q&A

Q: Can you please recommend CDN ETF for REIT, Utilities and Financial sectors. Would you be comfortable holding 10% in each sector

Thanks for the great service

Q: Retired, dividend income investor. From a value point of view, which has more rebound potential....FTS or ZUT? Ya, I know...single company vs ETF, so tough to compare. I own both and have mostly full positions, with a top up in mind for both. Just wondering which one to do first...I am leaning towards ZUT.

When I look at the charts over various timeframes, it looks to my amateur eyes, that ZUT is much more closely tied to interest rate changes. It looks like ZUT started to really take it on the chin during 2022 when interest rates were being cranked up. Also, I am hearing/reading that the worst might be over for the renewables and they might start to rebound...which would benefit ZUT (for the record, I am overweight Eric's NNRG, so I have that end of the Utility-Energy spectrum covered).

Your thoughts?

Q: Hi, With CDN interest rates maybe coming down I'm wondering if a switch from a covered call utility ETF (ZWU) to an equal weight ETF like ZUT makes sense? ZUT though has a fairly high MER, so is there a better option, or maybe better to just buy individual stocks. Thanks.

Q: I've got 5 years left before retirement, and I want to slowly roll my RRSP from equities to etf's over the 5 years. This year I'd like to buy a few that will have growth over the coming 5 years, thinking of beaten-up sectors like telco's and banks - do you think they have a runway for a 5-year plus hold (also thinking they have a good dividend, jumping in now), and what which etf's would you suggest if you agree with these sectors, or in other sectors. Thanks!

Q: Is there an ETF that provides equal weight coverage of the TSX similar to what EQL does for the S&P 500?
I would like to increase my ETF holdings providing a broad coverage of the Cdn market vs individual stocks. I already have a heavy weighting in individual financial stocks and most TSX ETFs would simply further skew my overall balance.

Q: Utilities generally continue to take it on the chin. I realize- high capital, prolonged elevated rates etc. is this a good time to add to stakes here or not? Is this part of a longer term concern?

Q: Could you please give me a Canadian ETF for each of the 11 GICS sectors within the TSX? An ETF that best represents the respective sector would be ideal. Thank you very much.

Q: Hi, I’m retired and have a $75,000 rrsp that I’m looking to invest. Would like two ETF’s one Canadian one U.S that complement one another, or four to five stocks.
Would like the suggestions to be fairly conservative with possibly 3-4% dividend. ( don’t really need the money). I’m slightly favouring the etf’s as I want a buy and hold portfolio with a sleep at night possibility. I do have lots of financial and energy stocks already, ( fyi) I know there is always risk that I’m willing to accept.
Thanks for your suggestion

Q: From a value perspective, where the current price is compared to it's historical price range and it's future potential, in what order would you add to these equities (NTR, FTS, XIT, XST, ZUT) to reach asset allocation goals?

I understand it is not apples to apples, due to some of the equities are stocks vs ETFs; and some are conservative vs aggressive.

When looking at both the technicals and fundamentals, I would suggest that NTR and ZUT are undervalued and could be earlier purchases, compared to FTS, XIT, XST. Purchases will be spread out over several months.

Your thoughts on the order?

Thanks...Steve

Q: Dear Peter et al:

From many of the articles that I have read, it appears that utilities sector is a safe bet for 2024. The rates are going to be stable and not rising seems to be the consensus.
If you agree with this thesis, what are the companies that do you think can mimic or match the return of an ETF like ZUT/XUT? I don't want to pay the high MER but willing to buy a small basket of stocks and hold them for at least 2-3 years.

Many thanks.

P.S. I have spent an hour browsing through the Q&A section and I "kinda" know what your answer is going to be(!!) but need some "handholding" :)

Q: Retired, dividend-income investor. Sorry...this is a market timing question.

I am in the process of building a position in ZUT. I'm about 70% there. Most of the remaining funds to attain my full position will be sourced over time (3-5 months). However, with the recent run up in NWC and its subsequent impact on my asset allocation, I will be trimming a bit of it (NWC) and plan to direct it towards ZUT.

Q#1 = In the past you have indicated not to worry about market timing, especially when it comes to ETFs. However, with the rise in interest rates and the negative impact on ZUT, roughly when do you think is a reasonable time to start the process of adding (again) to the utilities sector (specifically ZUT)? While the general consensus is that rates have peaked, when do you think the utility sector to start to recover its losses...do rates actually have to decrease or just plateau? Also, you have usually answered this type of question with spread your money out over a number of months and get on with it (my paraphrase). Same answer?

Q#2 = Tied in with this a question => relative valuation of ZUT? Where does it's current valuation compare to its historical range? Is it cheap now or pricey?

Thanks for your help...Steve

Q: Are Utilities stocks dividends safe in a rising interest rate environment? To wit, is there a high risk ZUT could slash its payout?

Q: Retired, dividend-income investor. I have funds available over time to invest in / top-up some of my positions to meet long term asset allocation targets. I plan on continuing to invest these funds over a number of months...as I have been over the past 8 months.

The question is = in what order do I buy the following = XST, XIT (several BNN-ers say to avoid adding to technology at this point), BCE, BNS, LIFE, ZUT.

One method is to wait for these securities to hit my price targets (based on hitting a combination of fundamental and technical targets (a little bit is kind of bottom-feeding).

A 2nd method is looking at setting the order of buying, based on where one thinks each security is relative to their historic value.

Ignore asset allocation...these are smaller amounts and the AA is reasonably good right now.

My suggested order, subject to where each security's price is at (please shoot holes in my plan):
Sept = BNS,
Oct = XST-#1 (in 2 tranches-spread out),
Nov = ZUT-#1 (ditto),
Dec = XIT-#1 (ditto),
Jan = XST-#2,
Feb = ZUT-#2,
Mar = XIT-#2,
As each hits their price target (minor adds) = BCE, LIFE.

Please state your order and why.
Thanks...much appreciated...Steve

Q: I would like to follow up on a question asked last week l, to choose between a reit etf and a utilities etf. And you advised the utility sector mapped here is better. Could you please advise on the dividend stock space in general to add in say telcos, banks, insurance and pipelines?
The broader discussion of the moment is about rates and their future path and relative value of earnings and dividends compared to t bills and low risk savings of the like.
Do you feel that any of these sectors are good buys at the moment? Could you maybe rank or group which you feel are best or just in vs out?
Thank you,

Peter

Q: Hello, from a defensive perspective that is least correlated with the stock market, which ETF would you purchase ? (All other factors remaining equal)

Q: What are your thoughts on owning ZUT or owning in individual stocks. If your preference is individual stocks could you recommend 10 stocks and a good entry point.

Thanks Brian

Q: I listed in descending order securities that under performed since their 2022 highs. Please rank the securities in order of the best chance to recover their losses when we get back to the risk on mode. Thank you

Q: With utilities and real estate under pressure these days, can you recommend 4 choices in each sector for a conservative investor with a 10 year time line interested in income with some capital appreciation. Please include 2 ETFs and 2 companies in each sector.
Thanks,
Len

Q: Could you pls provide ETFs for dividend and capital growth over the next 12 months for each of:
Communications Services, Consumer Discretionary, Consumer Staples, Energy, Financial, Health Care, Industrials, Information Technology, Materials, Real Estate, and Utilities?

Q: I manage my daughter and her husband's investments. They currently own the above equities (except XST), plus fixed income. I would define them as conservative investors.

Regarding their asset allocation, I am still in the process of building out their portfolio. They are a little light on Consumer Staples. I was trying to find a suitable ETF and came up with XST.

Q#1 = What are your current thoughts on XST? The constituent holdings actually look pretty good. The various rates of return also look good.

Q#2 = Are there other ETFs that I should consider? I couldn't find a BMO version. I have read the past questions on XST and it appears to me that XST is the front runner (compared to VDC and XLP), when looking at past performance.

Thoughts? Agree?
Thanks for your help...much appreciated...Steve