Investment Q&A

Q: Hi Peter and Team,

Across all accounts, our holdings in the Financial Sector include BN, FFH, GSY, MFC, SLF, and the CEW ETF. I feel that this is a fairly good representation but realize that the Canadian banking sector is quite low, and the US banking sector is non-existent in our portfolio. Portfolio Analytics indicates that we need more exposure in this sector.

Several questions; please deduct question credits accordingly.

1. TipRanks shows that BN has a P/E ratio of 125.13. Can this be true?

2. A recent question from a 5i member asked about Sagicor SFC, which prompted me to investigate it further. I realize that it’s a small-cap stock, but noticed that for the 3 month, 6 month, and year-to-date periods, it has excellent momentum (which I know you like) and has a really low P/E ratio of 1.51, which I assume to be correct.

3. Because I feel that Trump tariffs are more of a possibility than not, I’m in the process of adjusting some sectors but not all, in case the tariffs don’t happen.

4. Would you endorse a small holding in SFC, (say a half-position) using proceeds from the sale of more tariff-vulnerable stocks?

5. Finally, could you suggest some Canadian-domiciled ETFs that would give us needed exposure to both the Canadian and US banking sector?

As always, thanks for your assistance that helps us to make informed decisions.

Q: Hi Peter and all at 5i. Wishing you the best of the season!

Peter, first of all, I really enjoyed your last article in the National Post. Your financial stories were highly entertaining.

I manage a RRSP for my daughter-in-law. She has approximately 24K in cash due to a GIC that recently matured. (She got 5.16% interest).

She has these commission-free ETFs: CEW, QQC.F, XHC, XIT, and XST. She would have to pay a $10 commission on the following stocks and ETFs: BCE, BNS, FTS, PBH, SLF, WSP, ZIN, and ZRE.

Question 1. In what order would you suggest she uses the cash to purchase more of the commission-free ETFs?

Question 2. If there are compelling reasons to do so, in what order would you suggest she uses the cash to purchase more of the stocks and ETFs where there is a $10 commission?

I’m hoping that this question can be answered before Christmas if possible. Please use as many question credits as you see fit to provide a comprehensive reply.

Thanks as always for your valuable insight.

Q: I have 1.5 million to invest. I need income of $70000 per year before tax for the next 10 years. I hesitate to put it in to a single type of investment.. please suggest a mix I could use to get me close to this goal. A slight growth would be a bonus . Thanks

Q: Can you recommend a diversified etf with a high dividend that targets canadian market. Looking for sectors that are not to voltile.
T Steve

Q: I currently have exposure to CEW, which has an MER of 0.61% and a monthly distribution yield of 3.03%. Are there any alternatives to CEW that have a lower expense ratio and higher yield?

Q: My unregistered investment account has a 50% core of VEQT and 5 equally weighted satellites; CEW, VGG, XSU, ZEO and ZQQ. I am considering overweighting CEW and ZEO. Do you think this is a good idea, would you use some of the other satellites or just stick with equal weighting. I would like to maximize the return without unduly increasing the risk. Thank you

Q: Hi Team,
Could you suggest Canadian ETFs of the following sectors for Senior incomes :
1 /Reit 2/ Utility 3/Prefer 4/Bank/Financial 5/Energy.
Please deduct as many question credit as needed.
Thanks as always,
Tak

Q: Which Canadian financial ETF would you e-recommend at this time. I have zero exposure to banks, or telcos.
My only Canadian financial is GSY.
I was considering xfn or cew.
Or if you have another preference.
Or, would you recommend you suggest buying 2-3 names (if you list your top ideas).
Thanks

Q: Good morning,
Given that CEW includes Banks and Lifecos' and assuming that low interest rates will be with us for some time, I would appreciate your thoughts about selling CEW for tax loss harvesting purposes and purchasing either an exclusively bank ETF such as ZEB or purchasing two banks with the proceeds of the CEW sale. Also, could you also recommend two banks that you would recommend purchasing at some point with the proceeds of the CEW sale. Thank you.
Francesco

Q: In February of each year, iShares attributes a significant amount of Non-Cash Re-Investment of Capital Gains for the previous year for holders of CEW. For tax year 2018, it was about $0.533 per unit (roughly 4.3% of unit value). This increases my average cost, so when I sell it in my cash account, my capital gain is reduced (or loss is increased) an equivalent amount. I don't mind this too much in a taxable account.
1. However, If CEW is held in a registered account or a TFSA, am I correct in believing this non-cash reinvestment offers no advantage whatsoever?
2. Why don't these ETFs simply issue a cash distribution? That would benefit owners irrespective of which type of account the units are held in.

Q: HI Ryan,, What can I do to reduce or consolidate these shares. Too Many ? Thanks in advance Cliff zeb cew cdz xic xtr zev xtr

Q: Could you please confirm for me that the following stocks qualify for the dividend tax credit.
$BAM.a, $CGX, $ENB, $WSP, $SLF, $BCE, $CNR, $MG and the ETF $CEW.

Thanks as always,

Vater

Q: Hi: can you name your top three financial etf's for long term hold.

Thanks