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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Have all of these and so far all performing fairly well---they all around 2%
Want to top 2 of them up to 5%----or maybe you have a better choice.
Please advise your thoughts
Peter

Read Answer Asked by peter on July 10, 2019

Q: Hello 5i

Thank you for your prompt reply to my question as to which account was best to put XRE.

Would all interest from the security only be sheltered in an RRSP or would the same rules apply for a TFSA? At present, I have no room in my RRSP but so have my 2019 contribution money waiting for a home.

Thanks, as always, for your support.

Best
Peter

Read Answer Asked by Peter on January 24, 2019

Q: I would like to buy a REIT etf for my TFSA, to capture some tax-free income, and trying to decide among XRE, ZRE and VRE. What would be your recommendation? Or is your choice none of he above but something else?

Read Answer Asked by M on January 21, 2019

Q: Conservative, retired dividend investor. I've held Sentry in my Cash account since 2012 and sold 25% in 2017. My current weighting is 3.8% of my equity holdings. I didn't mind paying the hefty 2.44% MER when it was performing well. The last few years I have periodically compared it to ZRE and XRE, hoping for a turn around but my patience is running out. Now to be fair, Sentry reconfigured their REIT Fund a few years back to make it a global fund. Therefore the comparisons are a bit or apples vs oranges.

For the 1-3-5 year periods as of Dec 31/18, Sentry has returned -1.5%, 2.5% and 5.7%, while paying a 6.7% dividend.

ZRE = 3.2%. 11.3%, 7.3%, while paying 5.0%

XRE = 5.8%, 10.5%, 7.0%, while paying 4.8%

Question #1 = please confirm that all of these returns include the dividend payments.

Q#2 = while I love the higher dividend via Sentry, it really is all about Total Return over the long run. Is the global nature of Sentry (diversification) worth the lower returns?

The goal for this allocation is for stability, income, then growth, in that order. I am leaning towards selling Sentry and buying ZRE, due to the equal weight allocation. There are minor income tax ramifications.

Your advice is appreciated...Steve

Read Answer Asked by Stephen on January 15, 2019

Q: Hi - I have no REIT exposure and am considering adding either VRE or XRE. They are both promoted as tracking the TSX/S&P capped REIT index. When I overlay a graph of their 2 year price performance sure enough they are virtually identical. At first glance it would seem a no brainer to go with VRE since the MER is 1/2 that of XRE (.35% vs. 61%). However, it also appears XRE pays a substantially higher dividend ( ~ 4.7% vs. ~ 3% depending on the source I check). Can you shed any light on why the difference in the dividend when they are both tracking the same index? Do you have a preference for one over the other? Thank You

Read Answer Asked by Morgan on December 13, 2018

Q: Hi 5i Team.

I have positions in the three ETFs listed above representing financial and Canad/US real estate sectors. The ETFs are at a reasonable cost and provide good yields. What is 5i's opinion about these three ETFs.

Thanks

Iqbal

Read Answer Asked by Iqbal on November 26, 2018

Q: Hi,
I'm looking at sectors, both Cdn and US as I have a lot of cash to redeploy as the market gets stronger, hopefully over the coming weeks or months. REITs are something I've been considering and I'm wondering about the effects of rising interest rates on them in general. Are REITs that are based on residential rentals better than REITs based on commercial properties? What about REITs for industrial properties vs commercial? Or would it be best to just steer clear of this sector until interest rates stop rising? I am retired and count on my investments to generate income, but am also lucky enough to be able to handle risk and I am very adamant about maintaining stops to protect capital and profits.
As always, your thoughts are most welcome!
Dawn

Read Answer Asked by Dawn on November 05, 2018

Q: hi folks:

i was always led to believe that reits are a group that falls into 'interest sensitive' assets
and they would get hammered in an increasing interest rate environment
hasn't happened and many are at all time highs
is this because the hope that inflation will raise rents/values to offset increased interest payments?
or because raising rates indicate an improving economy?
or because rates are increasing very slowly
or because we feel the rate increases are finished?
or what?

thx

Read Answer Asked by Robert on May 30, 2018

Q: Good evening,

Multi-part question.

Had just finished reading ‘The Little Book of common sense Investing’, decide to make the switch, and am beginning to plan my transition to CPD, ZAG, VFV, XEF, VCN, VEE, and XRE, when I come across the new Vanguard products, of which VBAL to me seems the most interesting.

I see the pros of this ETF as being straightforward and dropping from 7 commission fees (re-balancing myself), vs just one trade a year to add money (portfolio currently around $26,000).

Cons: no preferreds or real estate. Less control (e.g they decide the asset allocations).

Do you have an opinion on this ETF?

Not sure the yield on VBAL but am guessing 2.5-3% maybe? Any idea?

Also, If I go ahead with VBAL would you give it some time to settle down (trading looks a little erratic), or is that volatility purely a product of price changes of its holdings already?

Thanks!

Read Answer Asked by Jeff on February 02, 2018

Q: I am 53 years old. I have worked 31 years in my Federal Government job, making $100,000 + a year. I will have a defined benefit pension. Currently, I have a $200,000 in an RRSP, self directed,with 100% in equity divided 60/40 between CANADIAN AND US dollar investment. I am planning to retire in 2-3 years.

With this in mind, I want to rebalance my portfolio to make it more conservative. What ETF funds/percent allocations do you recommend to build the fixed income/bond portion of my portfolio both on the Canadian and US side of the house? What funds should I buy (Canadian and US) and how much should I buy of each?

Thanks in advance.

Read Answer Asked by Donald on October 19, 2017

Q: Hi 5i team, I'm looking to add one more name in the real estate sector. I currently have BTB Reit, Artis Reit and the etf XRE. Could you please suggest a few ideas. What are your favourite reits at this time and would you replace any of my current holdings? Thanks. Mario.

Read Answer Asked by Mario on September 20, 2017

Q: Hi 5i,
Just a comment on Nino’s question and your answer about the choice between paying up for a REIT ETF like ZRE/XRE versus holding 8-12 individual REITs. My choice has been the latter and I have been happy with it. Your answer suggested that rebalancing 12 holdings annually would cost $120 at $10 a pop. My experience has been that the reality is much less than that. Because the REITs tend to move as a group more than their individual movements relative to the group, in holding 8-12 decent quality REITs I haven’t had to do more than 2 or 3 rebalancing transactions in any given year. Except for a couple of extraordinary years my REITs have really been low maintenance holdings. Cheers!

Read Answer Asked by Lance on June 13, 2017