Investment Q&A

Q: I believe all of these ETF’s are paying close to 3%. How do they do this?

Q: Hi Peter, Ryan, and Team,

I just posted this on the forum. I noticed that the Fixed Income thread in the forum is rarely used, and hope it's OK to post this as a "question" so that more members can benefit from what I recently discovered.

This is a heads up to anyone who uses Scotia iTrade. Up until recently, iTrade included CMR as a commission-free ETF, but it has recently been "de-listed" as free, and now is subject to a $9.99 commission. :(

I used to use CMR to park money received from dividends in our RRIFs, to accumulate "safe" cash for the mandatory RRIF payout. No way can a commission be justified going forward!

Q: Thanks for the wonderful work from the team. I am holding BRLXF since past 2 years. Have a good 100% gain. However in past 6 months its down significant from about $40 to $30. Do you still see a good growth potential for the stock or would you recommend something else in this sector. Holding period is long 5+ and comfortable with risk and volatility.
Also any recommendation on any ETF or something else where one can park cash component of the Portfolio. I hold about 10% of portfolio in cash to be deployed at times when market is over sold .

Q: Hi,

In my RESP's fixed income/cash allocation, I hold CMR, CBO and HFR.

With a rising rate environment I'm thinking of switching the CBO share into HFR (although the laddered aspect of CBO mitigates problems a bit). And with CMR stopping their distributions, I thought of switching out of that too. Does this logic make sense or would you prefer having both CBO and HFR for diversification purposes? Thanks!

Q: "Asked by Jerry on March 25, 2021
5I RESEARCH ANSWER:
It is hard for us to comment on the specific strategy, as it does sound a bit like market timing if we understand it correctly (go to cash, CMR, then switch to financials/income, FIE). CMR is far less risky than FIE as CMR invests in money-market instruments. In turn, the yield is 0.24%. FIE has more equities, and in turn more risk, but also yields 6%. Due to the different risk profiles, it is hard to compare. If stability of the capital is less of a concern, and the income stream is more of a focus, we would be fine with FIE. But if stability of capital is the focus, CMR likely is the better choice. "

I just wanted to add a little comment to Jerry's question earlier on CMR. I used to hold CMR, but it hasn't paid a cash distribution since September 2020. So, aren't you taking the risk of holding without any benefit? (No return, no CDIC insurance, market risk. I sold my units because of this.)

Q: Hi Peter, Ryan, and Team,

Back in 2014, Larry Berman said: " CMR-T is a money market fund. FIE-T is a multi holding income strategy holding all kinds of assets, so there will be more volatility. When markets are up go into CMR-T and FIE-T when they are down."

I'm asking this question to see if Larry's thesis is still valid. Our broker is Scotia iTrade, and both CMR and FIE are "commission-free" for both buying and selling. What we've been doing is to deploy dividends in our RRIF's into CMR, so that we can generate cash for the compulsory RRIF withdrawals. I was wondering if FIE could also be used, following Larry's advice, while realizing that FIE is more volatile than CMR. Thanks for providing such useful advice and insight.

Q: I'm currently holding about 30% of my portfolio in cash. Partly as a hedge and partly as liquidity should there be a market correction upcoming. The rest is invested in blue chip dividend paying stocks and a couple growth stocks.
I understand you don't give personal advice on weighting ands risk level but would you consider this too /very conservative?
I'm looking for suggestions to park the cash to make some sorta of return and can only come up with CMR but yield is so low not even sure if its worth it. Thoughts?

Q: Hello, I presently have a managed account with TD Wealth. Is there a no management fee account where cash can be held? What is the difference between PSA and CMR? Where would you want your cash to be held?

Q: Hi Peter and Ryan,
We received the last portion of our funds in cash from Sun Life today. We are a little hesitant to open new equity positions or foray into bonds. The stock analysis highlights that we need to add REITS but that sector seems to be under pressure this week. The risk and payback seems unbalanced everywhere we look today.
As we are into our early 60's we have given thought to placing 40% of our portfolio that arrived as cash into a temporary safe place. If you were to choose today which ETF's are recommended out of CMR, XFR, HFR to place funds for deployment at a later date.
Cheers
Jerry and Debbie

Q: In Jan 26 response you mentioned cash like ETFs with a similar yield to High Interest Savings Account for short term savings of cash. Could you name a few?