Investment Q&A

Q: Hi, You already mentionned here that ZEM was more "tax efficient" than VEE, since "there is no US withholding tax" with ZEM. From what I can observe,VEE is only including emerging market stocks (and no ETFs or US stock), could you explain to me why VEE would be less "tax efficient" than ZEM ? Regards,JY

Q: I'm considering buying these two ETFs which will be about 5% of my portfolio in total. Is this too much for emerging market exposure or not enough? The mer for each of them is reasonable but one concern I have is that both have BABA & BABA seems to be out of favour with the Chinese gov't. Is that %age a problem? Has this sector already run too far or does it still have room to grow?
Thanks very much for your advice which has been so helpful during my investment journey. To all the team Happy Holidays.
Dave

Q: In a previous question I asked the following:

I am looking to purchase both XEF and ZEM to increase my international exposure. Any recommendations of percentage allocations to each? Thank You
Answer:
We can't personalize allocations, but if we owned these we would look to 10% XEF and 5% ZEF.

In relationship to your answer, Portfolio Analytics suggests I have 35% in foreign market exposure and the answer given would make up 15% of the 35%. Are there any other ETF's you would suggest to make up the remaining 20%? I realize you don't give personized advise, however I'm looking for a generalization to increase my international exposure?
Thank You

Q: I am looking to purchase both XEF and ZEM to increase my international exposure.
Any recommendations of percentage allocations to each?
Thank You

Q: hello again

For my non canadian and non USA holdings, I have relied almost exclusively on VEA for the last two years with ok results. I'm wondering if the Asian markets ( China, Taiwan, Japan in particular) won't fare better in the coming years than will many other geographics. Do you think it wise to switch to a different ETF and if so, which would you suggest? thanks. Al

Q: I am quite interested by ZEM for diversification,and also for China, since China will probably become soon the first world economy...Concerning tax efficiency, are the "non-US stocks" listed on US markets submitted to the US tax on dividends? and are the foreign stocks listed on "non US markets" submitted a foreign tax on dividends (for most ,or for a minority) ?Thanks, Keep doing your excellent job , great help for all !

Q: Hi

On the issue of ZEM being more tax efficient than VEE. Does this apply in registered accounts?

Q: Do you know why BMO emerging market ETF (ZEM) contain 10.7% of US holding ?

Q: Thoughts on XEC and another recommendation in this investment area? Thanks...

Q: If one is only invested in North America, would now be a good time to buy VEE, or if you have a better idea for emerging markets? Also, if one has built a conservative portfolio for elderly parents using only VBAL and VCNS, would adding VEE be a good compliment, or would it add significant risk ?

Q: My International exposure has been identified as deficient. After reading the Q&A the above ETF's have been identified. My question is would the above as a50/50 split provide good international diversification or would adding another ETF help. If another is needed what would be your choice, and how would you divide the positions eg. 1/3's
Thank you,
Mike

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: Hi 5i team,
What is your favourite top pick for India ETF and your top pick for China ETF (preferably in C$)? Or would an emerging market ETF be a better investment approach? Which emerging market ETF you prefer that has a larger percentage invested in China and India? Thanks for you advice.

Q: In recent questions, you have recommended VEE as a Canadian emerging markets ETF. In the past, you often recommended ZEM. Is this observation correct? If it is correct, why do you now prefer VEE to ZEM?

For a TFSA account, would you still prefer VEE to ZEM? If I am reading the company information correctly, ZEM appears to be more tax efficient and has had a higher return over the last 5 years.

Your advice is most appreciated. Thank you.

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: Hi 5i team,
I would like to have emerging markets equity exposure within my RRSP. Currently, my RRSP holds mostly US situs securities in a U.S. dollar brokerage account (TD-Waterhouse). I am debating between buying VWO (trades in US$) or ZEM (trades in CAD$). I use Norbert’s gambit to convert between currencies, so doesn’t matter so much if I make conversion now (from US$ to CAD$, if I buy ZEM now) or later when I need to withdraw the funds (if I buy VWO now, raising US$ from sale of US$ securities already held, and later converting to CAD$ when funds required for RSP withdrawal). Any emerging markets ETF(s) purchased now would likely be held at least 10 years (potentially, much longer, depending on longevity—spouse and I are both aged 60). One other consideration; we are HNW situation, so US estate tax considerations potentially in play, too (depending on U.S. laws at time of our demise, and specific holdings owned at that time; this consideration would favor ZEM). My question—given the above considerations (currencies, fees within RSP, estate)--which one of these two ETFs would you recommend for long-term emerging markets exposure within an RSP (or, if there is another ETF you would recommend for long-term RSP holding for emerging markets, which would it be, given the above situation?).

Q: I have $40,000 US to invest for 5 -10 years. With half of that amount I would like to buy about four equity-based ETFs for capital appreciation. Some I have read about include QQQ , BBH, and VGT. Are these good choices? Please add other recommendations.
For the other half, I would like more income based ETFs with a sensible degree of risk, such as VIG. Please add other recommendations.
I am not interested in Canadian based ETFs but International based ETFs would be alright.
I do no previous experience with ETFs.

Q: Looking to add some tax efficient income to an otherwise well diversified portfolio. What do you think of the above mentioned ETFs? Could you suggest a couple of more?
Thank you!

Q: Hi 5i
Hope you can help me. I've managed my and my wife's registered and unregistered accounts for a number of years and I'm satisfied with the results. Those accounts primarily hold equities and I spend quite a bit of time overseeing them and tweaking as I think necessary.
I've now been put in the position of acting as trustee of funds for two minors. The time frames the two trusts will run are 7 and 9 years respectively and the principal amount of each is approx 75K. I want to invest the funds but I don't want to put them in individual equities and manage them as actively as I do our personal accounts. I would prefer to put them into ETF's that I can keep an eye on monthly or quarterly and not worry too much about tweaking.
Being optimistic by nature I'm hoping to arrange to get it all for these two trusts - capital appreciation, income, sensible degree of risk, Canadian, US and international exposure, favourable tax treatment, etc.
There are an awful lot of ETF's out there and I really don't know how best to evaluate them to shake out a reasonable number to look into further - especially considering how difficult it can be to identify individual holdings to effectively avoid overlap and provide diversification.
With all that in mind, could I ask you to list 5 (or so) equity based ETF's for each of CDA, the US and internationally that you think might accomplish the goals I've listed, so that I can then look into those ones further and make some decisions about where to put these funds I'm charged with managing.
Also, if you do have any general or specific advice that you think might be useful to me in the situation I've described, I would certainly appreciate your including it in your answer.
Thanks very much and please deduct credits as you feel appropriate.
Peter

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.