Investment Q&A

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: Do you see a need to hold both these ETF's. If not which is your preference.
Thanks

Q: Good morning,

I am considering increasing my international exposure as per portfolio analytics and am stumped between ZDI and PID. Both hold a lot of the same investments. In fact 31 of the ZDI stocks are the same as PID holdings are the same, although not in equal proportion (roughly 44% ZDI to 34% PID - mostly due to fact that the PID strategy is close to equal weight investments). My current positions in both funds are 5% and 3.75%. I am looking at increasing either or combining. I also have a 4.75 % position in QEF which I feel is sufficient since I am not yet convinces ESG is the way to go.

Can I have your thoughts on PID vs ZDI ? Thank you for your valuable input.

Q: Is there a Canadian listed etf that focuses on ex-North America dividend growers? Thanks, Bill

Q: I plan to retire in the next few years and have in mind to replace employment income with dividends. I have moderate to high risk tolerance. What dividend generating index funds or ETFs do you recommend to be in each of the following. My funds are split as noted below.
RRSP: 70%
TFSA: 10%
Cash account: 20%

Q: Good Day,
Previously, you recommended that I consider purchasing ZDI in order to add international exposure to my portfolio. According to the portfolio tool, I still only have about 4.5% international exposure (the tool recommends 35%). I'm just wondering if you would still recommend purchasing ZDI in order to build international exposure?

Regards,

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: Hi 5i,
This may well be 4 questions, so please deduct points accordingly.
Portfolio Analytics indicates that I'm underweight in Communications Services, Consumer Defensive, Industrials and Consumer Cyclical, and I'd like to top up these sectors.
I try to be a balanced investor and like income, but I don't mind taking on more risk and little or no income on something with a solid premise. Especially right now I'm looking for companies that are poised to benefit from the return to (more or less) normal life that 2021 might bring.
My present Communications Services weight all comes from the following ETFs - TXF, ZDI, DISC and ZWU. Can you provide a few Canadian equities to look at in this sector at this time, other than the big four?
My present Consumer Defensive weight comes mostly from NWC, with a smidgeon from ETFs like ZFI and DISC. Are there two or three Canadian equities in this sector you'd currently recommend looking at?
My present Industrials weight is in FTG (which I'd be happy to sell unless you think it has the potential for recovery in the coming year), QST and XBC. Are there another two or three Canadian names you presently favor in this sector?
And finally, my only Consumer Cyclical other than whatever might be in the listed ETFs is NFI (although I'd have thought it would properly be classified as an Industrial). Again, could you recommend two or three Canadian equity names that might qualify as viable Consumer Cyclical holdings going forward?
Thanks a lot and Happy New Year!
Peter

Q: Need more foreign exposure ex-Canada and ex-USA. I already own VEE and ZDI, should I just add to these or does 5i have additional suggestions? Looking to cover all bases here. Thanks Ron

Q: Hello 5i,
As always, a huge thank you for all you do!!!
Income-focused investor.
My question is in response to a previous question, in which answer to, you seemed to favour PID over ZDI. I hold ZDI and have previously discounted PID as an option for two specific reasons: 1) ZDI is almost 3x larger in market cap (328 million versus 124 million (from Globeinvest)) and also the average volume is many times greater (today's volume notwithstanding - PID seems relatively illiquid). I have seen previous answers re: ETF's in general where you are less keen on what are almost micro-cap ETF's for other than the most niche of offerings. I have occasionally had concerns about ZDI's relatively small market cap as it is. The yields between these two are only about 1% with ZDI being marginally higher. So, given the foregoing, do you see the growth profile of PID so much of an advantage that you would still endorse it over ZDI? I would have no problem switching, but my previous concerns would need to be allayed somewhat before considering the move.
In general, what would be the "line" for an ETF market cap below which you would not endorse?
Your thoughts??
Many thanks - be well and stay safe!!
Cheers,
Mike

Q: Looking for some feedback on my International holdings in my RRSP. Currently have zwp; zem; and Zdi.
I am interested in PID to compliment my existing holdings. I would split my current zdi holding to make 4 equal positions.
Pid has had better performance over the last 5 yrs, covers the same geography as zdi however with different country and industry weighting’s. Pid’s MER is higher than Zdi with a lower dividend.
Is it worthwhile to split my zdi position, convert entirely to Pid or leave well enough alone.
I do not have to Rif for another 9 years

Q: Theses ETFs nd many more trade on the TSX in CDN$ but are they currency hedged or not? I understand currency hedging but how can a foreign based ETF trade in Canada without hedging? Thanks Ron

Q: Would a combination of VEE and ZDI cover off the international portion of a portfolio? Long term holds for diversification, growth and some income. Thanks Ron

Q: All of my international holdings in my portfolio are in XEF and ZDI. I'm an income investor primarily. Do these two holding offer enough diversification? Is there a international dividend ETF that your prefer over ZDI?

Thanks,

Joe

Q: Hey guys,

We already own DXG, would you recommend any others instead of DXG for international exposure? Also, a full position on individual stocks is between 4 to 5% (hopefully letting them grow to 7 to 8%, ), what about etfs?
Thanks

Q: Please provide your favorite international dividend ETFs. What do you think of XGD and ZDI? Thanks.

Q: How would you rank these ETFs. Would you hold all three or is there to much overlap between them. If not these do have another suggestion for international exposure.
Thanks

Q: Hi 5i Team,
I do not have any international exposure and I am wondering if you would recommend a dividend ETF with some upside potential. What account would it be best held in? Do you think this is a good time to enter? Thanks so much.

Q: Looking for some guidance on my International equity holdings. All of my Int’l holdings are in the above ETFs and are in my RRSP accounts. The Int’l portion represents 10% of my total investment portfolio. Generally I look for a balance between income and growth with dividends used to supplement my pension income. I have 9 years before I have to RIF.
I have only recently added ZEM for its emerging markets exposure and tax friendly structure. While the other holdings have provided good yield I have not been happy with the lack of growth even before the latest correction. I am generally comparing the lack of growth to the US market which may not be a fair comparison.
Could I have your opinion on my holdings and any suggestions for improvements and why. I am looking for good diversification across the world, ex North America, with a view to a balance between income and growth. Would like to keep my holdings in CAD.

Q: Last year, I purchased ZDH in my mother's retirement account. She is close to 80. It has been a very poor performer, significantly underperforming the international indexes. Performance seemed to be reasonable prior to the market drop in the last few months. Morningstar now rates both ZDI (unhedged) and ZDH (hedged) as two stars, and it now falls to the 4th quartile for most time periods.

I would appreciate your views about ZDH. Would you continue to hold this ETF expecting that it will start to outperform the market, or would you sell it? Do you feel that it has dropped a lot since January due to its sector composition, and will bounce back? If you would sell it, what would you recommend? Dividends are not a priority, but looking for low to medium risk.

Thanks for your excellent advice.