Investment Q&A

Q: Can you recommend Are a few bond ETFs that do not pay their interest but the ETF prices go up. I want own bonds and avoid taxes on their interest. I know I will be caught with capital gain taxes, but capital gain taxes are half of interest taxes.
Thank you

Q: Having some funds to invest in bonds are there other bond funds like HBB that would fit in a taxable account not paying distribution but rather transfer into capital gains. I currently own HBB.

Thank you
Yves

Q: Hello, are there bond ETFs in CAN$ that would not pay interest, for a taxable account? Thanks.

Q: I read in Q&A today that HBB delivers it's yeald as capital gains. How does it work? I searched everywhere and haven't found the information not even on the Global X website.

Thank you all

Q: Hello, regarding HBB, is its performance over the years comparable to XBB, for example? Would you recommend HBB for a taxable account? Thanks.

Q: Hello 5i Team

1 - HBB

Global X's webpage for Global X Canadian Select Universe Bond Index Corporate Class ETF (HBB) lists the following fees:

Management Fee - 0.09 % + applicable sales tax
Management Expense Ratio - 0.10 %
Trading Expense Ratio - 0.15 %
Swap Fee - No more than 0.15 %

Therefore are the maximum total fees that I would pay for HBB as follows:

Management Expense Ratio + Trading Expense Ratio + Swap Fee

0.10 % + 0.15 % + 0.15 % = 0.40 %

2 - HSAV

As HSAV is also a corporate class fund why would Global X not list a swap fee for HSAV?

Thanks

Q: Would you say selling VAB and buying HBB would be a superficial loss in CRA's eyes? Or are they different enough? They do track different benchmarks (by title, at least).

Q: I have 2 unregistered accounts and hold too much money in HISAs. I would like to invest more in Horizon's total return ETFs that pay no distributions. I have been looking at HBB but the chart looks nothing like similar Canadian bond etfs. Today, July 10th, HBB is trading at the same level it did 5 years ago but XBB is 13% lower today, VAB 13% lower and ZAG 15.2% lower. Can you explain this large difference? Should HBB now track in a similar way to XBB? Thanks!

Q: For tax reasons, I want to buy some ETFs or stocks in my unregistered account, that pay little or no dividends. Which of the Horizon's total return ETFs would you recommend at this time? HSAV seems to be really unstable and I am concerned it could be a money loser in the short term. I read in the G & M that the manager of Langsford Wealth Counsel in Oakville has been buying HXDM with better valuation than the US. Thanks!

Q: Dear 5i,
In regards to Horizon's ETF; HBB.TO
There web site says the MER is 0.10% and the swap fee is
no more than 0.15%. Does this mean that %Gross Total Return gets
reduced somewhere between 0.10% and a maximum of 0.25%?
Are they any other fees other than trading fees I need to be aware of?

Q: Can you comment on the makeup and duration of the bonds in this ETF? Is it comparable to XBB.

Q: Hello 5i Team
To increase my fixed income allocation, I need to add fixed income to my non-registered account.
I am looking at the Horizon Corporate Class ETFs, in particular the Horizons Cdn Select Universe Bond ETF (HBB) in comparison to BMO Discount Bond Index ETF (ZDB), BMO Aggregate Bond Index ETF (ZAG) and/or iShares Core Canadian Universe Bond Index ETF (XBB). I am not familiar with the concept of Corporate Class ETFs.
1 - Is HBB a reasonable alternate to the listed major bond funds?
2 - Please confirm HBB does not pay a distribution and that “income” is reinvested in units of the ETF resulting in potential increase capital gains in the future.
3 - What would be the impact of a future increase in capital gains inclusion rate (from 50 % to 75%) have on corporate class ETFs?
4 - Is there a minimum dollar amount where the corporate class ETFs start to make sense (i.e. is better to pay the tax on a distribution from XBB when the dollar amounts are relatively small)?
Thanks

Q: I sold my business and started investing last year. I am trying to build balanced portfolio and struggling with the bond portion. I don't want to buy individual bonds and was looking into something like HBB for unregistered portfolio and VAB and XSB for registered. Yet, I am very uneasy about buying bond ETFs in the near-zero interest rate environment - the rates can only go up (unless we end-up with negative rates here) and, obviously, bond ETFs will be going in the opposite direction. I was thinking about VSC but almost 35% of it are junk bonds, so no comfort there. With PSA now paying only 0.65%, I am really out of choices for the fixed income portion of my portfolio. Any suggestions (both for CDN and USD positions)? My time horizon is 10 years and I want something safe and tax efficient.

Q: I have a larger cash account with a 10+ year horizon and would like generate capital gains only and no significant dividends. I like the Horizon TRI funds but would also like to invest in some individual stocks. Could you recommend some good stock (or other ETFs) that pay out little or no dividends.
Thanks!
Grant

Q: I have a non-registered account, with 8-10 years before the funds are needed. To minimize tax, we would like focus on 100% capital gains, if possible. Can you recommend some ETFs or individual stocks? We have been looking at Horizon's corporate class ETFs. Thanks for your continued excellent non-biased reports!! Grant

Q: When I compare MFT (that I own) and FRL.UN with ZFH and PGI.UN I don't understand why the former don't perform as well as the latter. What can explain that and what would be the best bond ETF (low volatility and reasonable yield) to own within a registered and non registered account. Also, do you know a bond ETF giving mostly capital gain for a non registered account to reduce the income in interest.

Q: I am looking to buy fixed income funds in my corporate account. What would be your top picks of the ones listed? What are the rate of return - fees? Thank you for your website.

Q: I have an existing bond allocation in ZAG in registered accounts. However, in order to maintain an appropriate asset allocation I need to start holding fixed income in a corporate cash account. Do you have any concerns using HBB for this purpose (e.g. size, liquidity, etc)?

Q: Could you tell me why HBB & HTB are trading close to their 52 week highs, whereas similar eft's are closer to their 52 week lows?
Thanks for your service

Q: I am setting up a fixed income portfolio for 5 -10 years with little need for income. HISA @ 15%, HTB @ 5%, HBB @ 5%, PYF @ 5%, HFR @ 20%, MFT @ 50%. I would increase the Horizon's ETF percentages, but liquidity is low. Would you please comment on this set up. Thanks for your service.