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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: Hello, I'm recently retired. I am seeking income generating vehicles for my various, registered plans (RRSP, LIRA, TFSA) to invest in. I'm considering an investment in ZWU. I'm wondering if there might be a similar, utilities based, covered call, ETF available for the American market?

Lastly, if any of these ETFs might also be available without the covered call overlay and if you believe that those versions of the ETFs might provide better, mid-term probability of a greater Total Return; I'd be interested in your opinion, as well.

Thank you!

Read Answer Asked by Richard on November 29, 2022

Q: Peter, one of the worst 'safe' investments I have ever made has been ZPR. Looking for a somewhat enhanced yield and a bit more safety, my 2014 investment shockingly dropped by about 40% in a year! The explanation 5i offered at the time was the declining interest rates combined with ZPR's rate reset preferred share holdings. But now, interest rates are INCREASING and ZPR is again down - almost 20% in the past year, and 12% in just the last six months. I realize other factors can move prices, but I'm mystified how a supposedly more stable investment can decline so much, so quickly, both when prevailing interest rates go UP and when they go DOWN! Do you have any explanation that might make sense to a mere mortal?

Read Answer Asked by James on October 21, 2022

Q: I think I misunderstood your previous answers on ZPR to mean it was the better preferred ETF to be in considering it holds rate resets, which should go up as interest rates rise. However, your last answer indicated it holds significant long exposure preferreds, which would cause it to fall more heavily under the current environment?

To be clear, what is your best idea for a preferred ETF right now?

Read Answer Asked by Curtis on April 19, 2022

Q: Any idea why preferreds are collapsing the last few weeks? Some to below their recall rates of $25. I only own rate reset preferreds and the BMO fund ZPR. With the prospect of higher rates I can see why perpetuals would drop, but rate reset preferreds should benefit from higher rates. Even those with minimum resets of 5% are on the decline. Thanks.

Read Answer Asked by Ken on December 07, 2021

Q: Hello,

I am concerned in a rising interest rate environment CBO (5.0%), CPD (1.92%), XHY (7.4%), VAB (4.13%) are positions that need to change in my portfolio. Portfolio Analytics recommends holding 35% in fixed income. I currently hold about 18%.

Should I be selling some or all of these positions and then re-investing in other fixed income vehicles given the rising interest rates?

I would appreciate your feedback/suggestions on current position. Thanks again for all your great service.

Read Answer Asked by Mauro on November 08, 2021

Q: Expectations of sooner-than-expected rate increases have pushed short-term yields higher in recent days. If so, interest rates could be headed up faster than thought, with dismal consequences for stock prices and real estate speculators. Can you suggest a Canadian Bond EFT that would be suitable during this period of inflation? Cheers.

Read Answer Asked by Ronnie on November 03, 2021

Q: I'm thinking of switching my CPD to ZPR because the return of ZPR has been significantly higher and the dividend is slightly higher. Curious what your thoughts are. Do you prefer one over the other? Any reason to own both - half in one, half in the other?

Read Answer Asked by Carla on October 18, 2021

Q: Hi Team,
Could you suggest Canadian ETFs of the following sectors for Senior incomes :
1 /Reit 2/ Utility 3/Prefer 4/Bank/Financial 5/Energy.
Please deduct as many question credit as needed.
Thanks as always,
Tak

Read Answer Asked by Tak on October 12, 2021

Q: Hi! I have an ETF portfolio and a portfolio of Canadian and U.S. stocks. I have 10% of my ETF portfolio in Fixed Income given the historically low interest rates. This accounts for about 5% of my overall portfolio which is pretty low. Difficult to add here. I have some XHY and CBO which offset the risks of rising rates somewhat. Should I add to my fixed income portfolio or wait for rates to rise a bit. If I do add, rate reset preferred might be another option or continue adding to CBO and XHY?

Thank you,
Jason

Read Answer Asked by Jason on September 09, 2021

Q: With interest rates moving up on growth optimism, do you like CVD as part of your fixed income allocation. Seems it might hold up better than other bond funds and it pays a decent yield. I'm also considering ZPR in the fixed income side for the same reason. If this is two questions, please deduct accordingly. Thanks.

Read Answer Asked by Curtis on February 26, 2021