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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: I've recently sold my ZRE position and am looking for some suggestions on what to consider purchasing with the extra funds on the fixed income side of my portfolio. My equity portfolio is balanced; I am about 8 years from retirement, and am conservative in my approach. I am about 30% in laddered GICs, 5% individual bonds, 3% CPD and 5% in cash. I don't have any bond ETFs (and am concerned about the principal in a rising interest rate environment). What to do with the extra cash? More CPD? Or an international REIT? Or a bond ETF, Canadian or International? Or something else?
Read Answer Asked by Brenda on July 24, 2017
Q: Hi 5i Team
We have approximately $80,000.00 US cash to invest. Thinking of buying XHY for income to cover some of our expenses for property we have in US. Would like your opinion. It would be approximately a 5% position of our portfolio. In the event you think it would be a good idea, do we deploy the funds gradually or take the full position at once, obviously it would be based on what is available for purchase. We would probably us our TFSA account. What would you suggest. Thank you. Heather
Read Answer Asked by Heather on July 14, 2017
Q: Greetings Peter and 5i Team,
I have $100,000 to invest in the fixed income part of my portfolio. All investments will be inside a RRSP. As a retiree, I'm hoping for capital preservation, (safety) with a reasonable return on my investment. Currently, the only exposure I have to fixed income is ZPR. I'm considering adding the investments in your Income Fund (CVD, XHY), as well as HFR to my portfolio.
-Do you believe these investments will provide solid fixed income exposure?
-Do you see any way I can improve my exposure to the sector? i.e. is there any need for exposure to foreign bonds?
- What percentage of the $100,000 would you allocate to each ETF?
As always, thanks in advance for your appreciated support.


Read Answer Asked by Les on July 13, 2017
Q: With interest rates likely increasing this month in Canada and also the USA, would you put any extra cash into bond funds (like CBO,XHY) or preferred shares right now; or wait to see if the prices decline with the new higher interest rates?

Thank you.
Read Answer Asked by Donald on July 05, 2017
Q: Dear 5i
Can you confirm the following yields and MER`s for the following Bond ETF`s;
CLF yield 3.04% & MER .17%
CBO yield 2.91% & MER .28%
CPD yield 4.54% & MER .51%
XHY yield 5.47% & MER .67%
Thanks
Bill C.
Read Answer Asked by Bill on June 01, 2017
Q: What is the best way to access and evaluate high yield bonds in Canada and the U.S.? I would like to add some risk to my portfolio, and improve the yields. My online investment platforms (RBC,TD) do not seem to make them available. Is there a better way?
Read Answer Asked by Michael on May 26, 2017
Q: A follow up on your recent response regarding XHY and BSJK.
What is the difference in risk factors comparing these two funds if interest rates rise as expected over the next 2-3 years.
I would expect BSJK to act like a single bond held to maturity ( 4% annual return with 100% of the principal returned in 2020 ). XHY yields 5.3% but rising rates could substantively reduce its value, resulting in a net loss if redeemed in 2020. Am I understanding this correctly?
Read Answer Asked by Lloyd on April 24, 2017
Q: Hi team,
Just a point of confusion: TD Direct Investing treats CBO, XHY and the like as equities, while in your Portfolio Review these are treated as fixed income. Does this matter as long as one is consistent in their assignation of the sector / allocation? I think it does matter as it changes the perspective of the portfolio as a whole. I would like your opinion.
Thank you
Stanley Cohen

Read Answer Asked by STANLEY on April 13, 2017
Q: The value of this ETF seems to have been holding steady at between $19.50 and $20.00 over the past year. What would make this ETF move higher or lower ? There is now talk of interest rates starting to move up, plus speculation that the Fed will get rid of some of its bond holdings. Are either of those likely to have any effect on value of this ETF ?
Read Answer Asked by Don on April 12, 2017
Q: Hi 5i Team,
I would like to take some money out of a savings account and have it accumulate dividends in my TFSA over a 5 year time period (I will need it at that time). I was wondering in the income portfolio, which of the ETFs/stocks would be the least volatile or the smallest of price movement that pays a good dividend over this amount of time?

Thank you,
Andrew
Read Answer Asked by Andrew on March 14, 2017
Q: Could you please outline the risks in holding these types of high yield bond ETFs, with respect to the effect on the capital and yield components. I have a long term (15-20 years) view.

Are there scenarios where more stable bonds (ie. XBB) might outperform it over a longer period (15-20 years) of time?

Thank you
Read Answer Asked by Mike on March 03, 2017
Q: I am interested in beefing up the fixed income portion of my portfolio. My adviser recommends PMO005. I see a MER of 1.39%. What do you think of this mutual fund? Are there similar ETF's at a lower MER. I know you don't usually like Mutual funds but your commentary in the questions and answers seems good on Pimco. Should I diversify fixed income into several bond funds? If so could recommend a few of your favourites please. Thank you for your great service.
Read Answer Asked by Brian on January 20, 2017
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