Investment Q&A

Q: If I buy an international ETF, from a tax perspective, is there any advantage/disadvantage to buying one based in the United States vs. Canada?

Q: Hello,
My portfolio mentioned that I need to add more international exposure to my portfolio. Can you suggest some good international ETF(s) or individual stocks that would be good for me to help balance my portfolio?

Q: I am looking for an ETF recommendation to increase my international exposure.

I currently own 15% in VIU and 12% in VEE. Income is not my primary objective at this time. I was thinking XEF but through there would be too much overlap with VIU and didn’t think that made the most sense. I am ok with going mid-small cap and thought an ETF like SCZ may diversify my current holdings. What are your thoughts of this fund and do you have any other suggestions?

Also, so you have any recommendations for an international small- mid cap value ETFs? Thanks for your help.

Q: Just a follow up on the XEF. Would the 37%(mostly japan) Asia component be adequate for an emerging market exposure or would you want a true ETF like the ZEM you mentioned to go along with XEF?

Q: I have been investing in ETFs for several years, using a simple 5 ETF portfolio which includes VCN (27%), XUU (27%), XEF (19%), XEC(7%), and ZAB (20%). When I use the portfolio analytics, the suggested ETF portfolio includes about 15 ETFs. Just wondering what if the added complication of the additional funds is worth the effort. I assume that yours has better downside protection as it reduces some of the concentrated sectors and perhaps has better returns? My portfolio has grown in size over the past years so I am ok with the additional work to manage the portfolio, just wanted to better understand why.

Thanks,

Q: Hi 5i,
I have $70,000 CAD to invest for 3-5 years and tax is not an issue. I am thinking of ETFs : 40% Canadian Stocks, 32% American stocks, 8% Global and 20% Bond.
Would you please advise what to buy? or if you have better combination.
Thank you.

Q: As a follow up to my question on July 30 re International ETF's.
I have quite a significant shift to perform. Reduce Canadian by 30% and increase International by 30% . You gave examples of international ETF's including XEF and ZDI. Did you purposely leave out China especially given the recent tone with the US or would XEC be a decent hold as well? Maybe 1/3 in each ETF?
Is this a good time to start the switch over or would you wait a bit to see where all the markets are heading? This would mainly be for non registered accounts and gather only one layer of withholding tax which is creditable.
Thanks
Jeff

Q: I need to increase international exposure by 30% and decrease Canadian by the same amount.
Could you list 3 international ETFs that would be most tax efficient for each of RRSP, TFSA and a non registered accounts.
Thanks
Jeff

Q: With the US proposed tariffs on Europe is it a bad time to buy XEF for a 5 year plus hold?
Thanks
Brent

Q: For a ten year investment, what would you recommend as your top three ETFs for international equities (i.e. non-US and non-Cdn equities) from a risk-reward standpoint? Does your recommendation change if the ETFs are to go in a registered or non-registered account? Dividends are not necessarily an objective. The ETFs can be from a Canadian or a US firm (i.e. Vanguard, iShares, BMO, etc.).

Thank you for this great service!

Q: I own these 2 ETF in non-registered accounts. Are their dividends subjected to a withholding tax?

Q: This is a follow up question regarding where to place XEF for tax efficiency. You Stated "These points could be argued, and could be variable based on one's exact situation and tax rate. But we would generally agree with this assessment."

Just wondering which points in my argument could be questioned. Also, if my corp is taxed just under 15% (small business) and my personal tax is low, does the reasoning fit better?

Thanks again,

Fed

Q: I am wondering if any of the following do not hold all their international stocks directly (ie if they are an ETF of ETFs). I am pretty sure that XEF, IEFA, and IEMG do own all stocks directly, and I think VEE does not, but please correct me if I am wrong. I cannot seem to find information about the rest.

IEMG XEF VEE XEC IEFA VGK SPDW VWO

Thanks again,

Fed

Q: In my TFSA thinking of sell 50% of XEF and buying FIVG for long time hold and growth
comments please
Thank you

Q: Do you like VA or better to invest in a different ETF? I own only this ETF and AFG Global Dividend Fund. The VA ETF has not performed that well and wonder if I should invest a better overall global ETF? If so what would be your recommendation?

Thanks

Q: We have( for me) a quite large sum of money invested in managed products. Any new money is going into Canadian equities ( 30%) following your portfolios and a mix of ETF roughly
30% USA at 10% SPY, 10% VIG, 10%IWO
30% International currently VE
10% emerging currently VEE
( I know "where is your fixed income" you ask, my spouse has a federal government pension which I count as our fixed income)
To date these sums are relatively small. As I start to shift large sums from our managed products to my self managed portfolio ( following the above ratios) I am ok with the mix in the USA spread to 3 etfs run by 3 different companies. With the international and emerging I am a bit concerned about putting all that cash with one fund (and company). Is this concern silly or should I have some diversification within my ETF holdings ( both in terms of funds and companies). For example instead of having 30% of my holdings in VE I would split it 15% VE and 15% XEF. So I guess the short questions are:

1. What is the max an investor should have in any one ETF( %)
2. What is the max an investor should have with any one company ( $ or %)

Q: I'd like to simplify my rrsp and have a constant stream of income. I was thinking of selling my 30 stock over weight in canada and buy 5 or 6 ETF. Making easier to manage and have more investment outside of Canada. Do you like ZWC 20% weighting Ca, ZWH,20% weighting Us , ZWP20% weighting Eur , ZQQ 20% weighting Global tech company and Maybe ZRE for last 20% because reits usually goes up in a negative market. Please give me your opinion on my ETFs and your 6 picks would be? take as many question credit needed. Income and diversification globally are my goal.

Q: 2 questions - please deduct as many points as needed.
Q1 - according to Portfolio Analytics, I need to increase my fixed income allocation by $90k. I own 4% positions in XBB, ZIC & PMO005 and 2.6% in CPD. Would you recommend adding to one of these or would you suggest adding another ETF?
Q2 - I need to add $125k to International exposure. Current international holdings include XAW, XMI & XEC at just over 2%. Should i add to anyone of these or add something else?

Q: Hi 5i team, Regarding my question on Apr 26 on foreign properties to be reported on T1135 to CRA, your answer was “If you are buying Canadian-based ETFs that hold foreign securities, then no. If the ETFs are US-based (US domiciled, US management companies) then yes.” Please expand and clarify your previous answer so I am not making assumptions. Are you saying if I buy ETFs from Vanguard or Blackrock then they are considered ‘foreign’? How about if I buy ETFs from Canadian subsidiaries of Vanguard, Blackrock, iShares? Or are you saying all ETFs listed on the Canadian exchanges are Not considered as ‘foreign’? Examples would be useful. Thanks for the clarification.

Q: Thank you for for answer yesterday about setting up my parent's investments. To summarize, they are very conservative, above 80 years old, and looking for safety and income.

I would now like to ask you about the distribution of the equity component of the investments (composing only 17% of the total, the rest being in bonds, preferred, and GICs). Those below are all in equal weight. What do you thing?

BEP.UN, BCE, BNS, CM, CU, ENB, TRP
XHC for healthcare exposure
IWO for US growth
VGG for US exposure
XEF (in a half position) for international exposure
VEE (in a half position) for emerging market exposure

Could you please suggest some more to round things out? I need another 5 or 6 stocks.


Also, do you have any objection to using ZAG and HYGH as bond substitutes for their conservative portfolio? I am buying individual preferred shares for that component.

Thank you once again,

Fed