Investment Q&A

Q: Greetings - To postpone tax liability from income, I would like to develop a balanced portfolio of stocks and ETFs for the medium term (3-10 years) that do not pay dividends or interest. Rather, I would prefer to incur the tax liability upon selling the holdings (capital gains). I am aware of Global X Total Return ETFs and stocks like BRK.B that do not pay annual dividends. Do you have any other suggestions? Thanks

Q: HXS/HXQ These ETFs seem to be lagging their US counterparts lately, any idea why?

Q: Best non-hedged ETFs in Canadian$ for the S&P500 and NASDAQ to be held in a TFSA?
Many Thanks!

Q: Hi, I'm looking for recommendations for ETFs to complement HXS and HXT in TFSA, for recurring biweekly purchases. What are your top two picks?

Q: Hi Team, as I implement the Smith Maneuver, I'm planning to invest monthly using the HELOC portion that becomes available with each mortgage payment. Given that the investment amounts will be relatively small and consistent each month, what would be the most effective investment approach in this context? Should I:

Invest the available funds into a fixed list of individual stocks (using partial shares if necessary),

Choose from the same list based on valuation or price action each month and % of portfolio or

Keep it simple and invest in a broad-market ETF for diversification and simplicity?

I’m trying to balance long-term growth potential with practicality, given the size and frequency of contributions. What do you recommend in terms of both investment strategy and tax efficiency for this kind of structure?

Thanks!

Q: Hello I am new to 5i (one week!) and am really enjoying the Q&A as a learning opportunity. I use one of the banks to invest our personal retirement funds (ie we don't have company pensions) and am keen to learn to self invest.

As a 60 yr old I have recently started an incorporated and am wanting to invest my incorp dividends appropriately. I have invested about 20% of my available funding and have a high cash position at present.

The information I have gleaned online is that a an incorporation should invest accordingly:

Corporation:

1. Corporate Class Mutual Funds/ETFs
2. Broad market ETFs (stock and bond ETFs) *capital gains only taxed when sold, reducing annual tax drag. Be mindful of whether dividends or capital gains.
3. Canadian dividend stocks (eligible for dividend refund mechanism)
4. Growth stocks (Capital gains taxed at 50% when you sell) but no Dividend reduction management benefits compared to Canadian dividend stocks.)
5. Investment Real Estate (Rental income is considered passive and taxed at 50%. Can reduce small business tax rate eligibility if passive income exceeds $50K)

The online information also indicates that incorporations should not invest in:

1, High Interest Savings accounts and GICs
2. Foreign Dividend Stocks and REITS
3. Actively managed mutual funds

As well - I have completed your portfolio questionnaire which tells me that I am an Alpha Balanced Investor. This happens to align with the personal portfolio that I hold for our retirement which is invested 70% in equities.

Based on the guidance you have been providing in the past week, I feel it is time to start $ cost averaging for my incorporation funding. I believe that my husband and I can live off of our personal portfolio and do not need to pull $ out of the incorporated for 3-10 years.

Given that my current interest is to starting investing my incorporated revenues, can you please recommend the selections?

I understand that you cannot provide personal recommendations. However, I suspect there may be additional members who have set up their own businesses recently and can benefit from a tutorial and investment recommendations. Thank you !

Q: I have CAD to invest in Canadian-dollar denominated ETFs: (1) Canadian stocks - VGG. XIU XIC XDIV; (2) US ETFs in CAD FX - HXS ZUQ ZMID and ZBK and (3) - EU ETF - HXX. How to go about assessing one against the other. Is there a better ETF in each group you would prefer? Would appreciate guidance on which ones are keepers for long-term hold? How would you evaluate them?

Q: Part of our total portfolio is invested in ETFs [non-registered accounts] and one-third is in Canadian-based and Canadian-dollar denominated US ETFs. Another third is in US ETFs - spread among Large Cap Value, Blend and Growth, and SMID. The final third is in Special US ETF - IAI ZBK AIRR PAVE SHLD PPA SMH UTES AND HXX. Your advice is requested as to which ones to over-weight, underweight or sell. Please rank each category, if you would. My lean is less tech/ M7 as already own most.

Q: On Jan 21 2025, "IVV" the IShares core S&P 500 etf is up .84%, and yet the "HXS"etf, which is the corporate class etf based on the S&P 500 is down .93%. Could you explain how this can happen?

Q: What's up with the HXS ETF today (Jan 21)? The Canadian dollar is down 0.1%, the S&P is up 0.65%, yet, instead of being 0.75% up, the HXS is down 1.2% at the moment and below yesterday's NAV. The volume is below average, so it doesn't look like any big sellers dumping shares. What can explain almost 2% difference between the expected and observed behaviour of this ETF?

Q: Can you please rank your top 3 Global X
total return funds with no distributions, in order of preference?

Q: Good morning,
I currently own HXS and HXT in most of my RESP/TFSA/RRIF and NON - REGISTERED accounts.
In completing an annual performance review of my family portfolio, I noticed that the difference in calendar year performance between HXS and HXS.U is quite significant. In fact for 2024 the calendar year performance of HXS was 35.04% while the calendar year performance of the HXS.U was 24.48%.
I assume that most of the difference can be attributed to the difference between the Can $ and US $.

Q1. If one believes that the CDN$ will remain depressed compared to the US$ for the foreseeable future, which version of these Global X ETFs, do you recommend holding in RESP/TFSA/RRIF accounts where taxes are not an issue.

Q2. Which type of accounts (RESP/RRIF/TFSA/Non-Registered) stand to benefit the most from holding these Total Return ETFs and in what order?

Thank you and I'll await your response.

Francesco

Q: Is there a total return ETF similar to HXS, but for the total US market? If not, are there any corporate funds you’d recommend to do the same thing?

Thanks.

Q: As a follow up to my question on January 8 regarding ETFs you suggested ZSP to represent S&P 500
Would HXS be a better alternative since there will be no withholding tax in the TFSA as per asked by Danny boy on January 10?

Q: What are some ETFs that do not pay dividends but value is instead increased through its share price? I have HSAV, looking for others. Thanks

Q: I have some fund from RRIF that I would like put into a TFSA and was just reading the latest issue of your ETF & Mutual Fund Update report. I am thinking of the above three ETFs and one stock. What are your thoughts. As a perspective, I would include some i2i fund if it was allowed in a TFSA.

Q: Are there US withholding taxes associated with the ETF's that are offered by Vanguard Canada (or any other Canadian ETF issuer) that pay a USD distribution??
Thanks

Q: Global X total return funds have been your recommendation for taxable accounts for quite a while. However, recently, I have observed an alarming trend with the largest of their ETFs, such as HXS, HXT, and HSAV: the premiums have been shrinking significantly, and HXS now trades below NAV. I have more than half of my investments in these three funds, so I am really concerned about this situation. Do you have any explanation as to why the premiums on total return funds have been shrinking and even turned into discounts?

Q: Hello,
I’m not sure if this question is out of scope. However my daughter and son in law are moving from Switzerland to Canada in the new year. They have some questions regarding their investments so I thought I would see if your team can help with answers.
- We have UCITS Irish domiciled ETFs so that we don’t have to pay US withholding tax - are these available in Canada?
- If not, are there any options to invest in for example an S&P 500 ETF (or other US ETFs) without having to pay withholding tax?
- do you have a brokerage account that you recommend? We currently use CornerTrader/CornerBank but they are not present in Canada so we have to switch

Q: I like what Global X has to offer in their line of ETF's. However, I think I read one of your Q&A responses a couple months ago that their can be a concern with overloading the overall percentage of ones portfolio with a given ETF company. Did I understand that correctly? If so, just wondering what the potential consequences are in doing that, and if you do recommend spreading investments over a number of ETF companies.

Percentages are personal, but perhaps 5i has a ballpark-ish range that they would be comfortable with for a given ETF company (?)