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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: I am a big fan of factor/smart beta investing, but I am having difficulty identifying Canadian made etfs with both adequate size and daily volume. Please suggest etfs sold in Canada to build a couch potato diversified portfolio covering a Canada, US and global geographic area. I am quite impressed with WXM and ZUQ. I am a senior with a conservative growth inkling. Please charge question credits approriately based on your time to provide a workable response. Thank you.

Read Answer Asked by Richard on February 09, 2022

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.

Read Answer Asked by Warren on February 16, 2021

Q: With BAM's takeover of BPY I will have some cash in my RRSP to invest. I want to add to my position in the US market. I currently hold the above ETFs in my RRSP in fairly equal weightings and represents a total of 20% of my total investible assest. The cash from BPY would represent a half position relative to my other US holdings. I do not need to RRIF for another 8 years.
2 questions:
1. Can you recommend another ETF for the US market in CAD that might supplement my current holdings or simply add proportionally to my existing holdings.
2. I am a bit concerned about the S&P 500 and the recent addition of Tesla which is at a stratospheric valuation in addition to the FANG stocks which are also at high valuations. (I also have a position in FANG with ZQQ). Would a switch to EQL or similar ETF provide a better balance and take advantage of a more broad market recovery in 2021.

Read Answer Asked by Bruce on January 07, 2021

Q: If you were to start an resp now, would you consider these etfs as suitable or a combination thereof,or do you have alternatives? Thanx.

Read Answer Asked by Steve on September 09, 2020

Q: The rise in stock prices of a few mega-caps (Apple, Facebook, Amazon, etc.) has distorted the concept of broad diversification through index investing (S&P 500). While the index rises, many index constituents have performed poorly.

Some ETF providers have created funds that hold a subset of the components of existing indices. Inclusion is based on their concept of company "quality". Presumably this eliminates poor performers and results in a "better" fund.
Examples are: ZUQ, SPHQ, QUAL, ZGQ, ZEQ.

Please comment on this idea of "quality" subsets of existing indexes. Do you consider this to be a useful investing strategy? Would you consider the examples listed to be preferable investments compared to the broader indices?

Thank you.

Read Answer Asked by John on September 08, 2020

Q: I am thinking of purchases of these 6 ETFs (or some of them). Would you see ZPAY, FCIQ, and FCUQ as being defensive? And back to the "where should I hold" issue: where would these 6 best be held for tax or other efficiencies: Cash account? RRSP? TFSA? Corporate account? Many thanks.

Read Answer Asked by Leonard on July 13, 2020

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.

Read Answer Asked by Peter on June 05, 2020

Q: Hi, I am looking to invest a new half position in SLF or add to a half position in PBH. Would you favour one over the other today? I donít mind risk, I favour growth, but am slightly light weight in financials.

Also, I currently hold VUN in my RRSP. After reading the ETF fund update, would you recommend switching to ZSP or ZUQ? I recognize the withholding tax advantage of the other two over VUN. Is that alone worth the switch?

Thank you.

Read Answer Asked by Dave on May 13, 2020

Q: Hi Peter, VCN and XAW are in one portfolio, VXC is in another. Would you add to these or is there a better choice considering the Canadian dollar or Covid? Thanks.

Read Answer Asked by Robert on March 26, 2020

Q: Hi Peter. I own ZWH.U which is down about 26%. I had thought that the covered call strategy would have provided some shelter from the downdraft, but it appears that really isn't the case. Oh well. My question relates to going forward. Since the covered call strategy will likely limit future gains, what ETF would you suggest for ZWH.U's replacement in my US accounts? thanks, J

Read Answer Asked by John on March 13, 2020

Q: I am looking to pair ETFs or stocks for growth and safety. What do you think about this idea and XMU [or ZLU] and ZUQ, for example. What portfolio percentage would you allocate to this strategy?

Read Answer Asked by sam on March 12, 2020

Q: Hi 5i,
Can I get your thoughts about any of these 3 ETF's from BMO for a buy and hold investor? Should one be concerned with the relatively low trading volumes? The general performance of all three ETFs look better than their underlying indexes.
The ETF's appear to rebalance/reconstitute semi-annually so my thinking is these might be good as core holdings for a long term investor since they are always suppose to hold the best quality stocks.

Here is the BMO summary of the product;
1. selects high ROE stocks
2. selects stocks with stable year over year earnings growth
3. selects stocks with low financial leverage
4. caps max. stock weighting at 5%

MER Holdings AUM AvgVol Description
ZUQ 0.34 126 330M 7,200 US High Quality
ZEQ 0.45 126 260M 6,400 Europe High Quality CAD Hedged
ZGQ 0.50 330 80M 2,500 All Country High Quality

Read Answer Asked by Ian on January 27, 2020

Q: I'm a conservative investor and planning on investing 60% of my Portfolio on the following ETFS.
ZLU, NMW, ZUQ, ZGQ, ZWH and FHC, what are your thoughts?

Thanks Valter.

Read Answer Asked by Valter on May 03, 2016