Investment Q&A

Q: Hi Peter and 5i Team,

Just a followup to my question about ETFs that focus on long term and mid term Treasury bonds, are there any ETFs that focus on Canadian Treasury bonds, or are the ones that you suggested (TLT, SPTL, VGLT, IEF), the best options?

Thanks again for your great work!

Q: What type of bond funds are best to invest in right now? Long term duration or short term, funds or can I buy individual bonds? Could you make recommendations for investing in todays market for the bond side of portfolio. I would prefer to make a 4-5% dividend but don't know if that is possible. Thank you!

Q: Do you have a preference between XBB and VAB?

Thanks as always

Q: I have $100,000 of cash in an investment account, am looking for some conservative ETF’s with 1/3 going to fixed income, same to Cdn Equity and balance to Global. Any suggestions? Given the trade war with the USA, I might sit on the sidelines for a few weeks so ny thoughts on best way to invest the cash with good liquidity. I was looking at HISA ETF’s but they are very low currently.

Q: I have a lot of cash and am planning to trim some tech stocks.
I have no ETF.s or bonds in my portfolio. Can you recommend some safe and growth bonds.

Q: Hello 5i,

We were reading a report on the risk for corporate bonds due to a tightening of spreads. Our goal from a previous question is to protect funds needed in the next 3 years to augment CPP and OAS (no pensions).

We added bonds, but that plan may require a new assessment. Currently, our portfolio has a small position (2%) of Bonds consisting of AGT, VCLT, VCIT, & VAB. We also have laddered GIC’s for 5 years, plus PSA & BIL (for vacations in the US).

We are looking at replacing AGT & VAB with PSA and VCLT & VCIT with BIL. Do you have any other suggestions that may meet our goals?

Thank you
D&J

Q: I sold zfl for a tax loss. Can you tell me if can would be considered a suitable proxy by CRA? Also, how do the durations compare?
Thanks

Q: In a best case scenario, I think 4 years of Donald Trump in power will be chaotic and discruptive in the US and globally. In a worst case, I believe the US is heading for internal unrest/violence, and the certain parts of the globe will be at war. If you were a 74 year old investor who has done well listening to 5i the last 2 years, how would you now hedge against these scenarios?

Q: I have $800,000.00 from the sale of a house, and am looking for a safe place to park it. There is a possibility of further interest rate cuts, so would a long term bond ETF be a good place?

Q: My son is 25 years old and saving to buy a house in the near future. Which is a better TFSA investment strategy for him, investing his savings in a balanced ETF Vanguard Growth ETF portfolio (VGRO.TO) vs. allocating 25% of savings to Vanguard Canadian Aggregate Bond Index ETF (VAB), 25% to Vanguard FTSE Canada All Cap Index ETF (VCN), and 50% to Vanguard FTSE Global All Cap ex Canada Index ETF(VXC)?

Q: Please provide you input on the pros and cons on the difference between ETF bonds, such as RQQ, with maturity dates, vs ETF bonds, such as VAB and/or XLB, with no maturity dates. Instead of investing in GICs, which you are locked in for a period, RQQ can be bought and sold when the market opens, making it seems to be almost as good as GIC.
Thank you

Q: For a long term investor with a focus on dividend paying companies or fund/ETF's are fixed income types appropriate for a T.F.S.A.? If so can you suggest 2-3 fixed income products?

Thank you- Jim

Q: The fixed income portion of my portfolio is fairly low. Would now be a good time switch from equities into fixed income in bonds, or has the horse left the barn? What would be, in your opinion, some suggestions for fixed income?
Much appreciated.

Q: As an older investor, I am considering a gradual move from mostly individual stocks to a fully ETF portfolio. My thinking is to allow management simplicity for my wife in the event of my death or disability. Seeking dividends predominately but also a representation of growth. Can you please suggest an array (portfolio) of ETFs that I could begin migrating towards? As always, your advice is appreciated. thank you

Q: This question or type of question was asked in the last week, but I can't find it. Sorry. My 2 kids each have about $100,000. I manage their money, but would prefer to just manage it through ETF's. Can you please suggest a portfolio of ETF's for reasonable growth (60-70% equities), but balanced with some bonds as well. If you want to cut and paste your answer to the question from a week ago, that would be great. Thanks a lot.

Q: I'm curious as to the lack of a high dividend paying etf in your Income portfolio? Also curious as to your thoughts on the partial use for these in a RRIF or PLIf account ( I am in MB and we have PLIF's). I'm setting up a PLIF and considering having more than a full position of HDIV, along with big stable dividend growers I'd pick from your favorites. I have a RRSP of the same value of the PLIF and investments in TFSA. I've been 100% equities all my life, eat volitility for breakfast. If you were setting up your own PRIF, looking to make significant income, what would it look like?

Q: I have just updated my portfolio analytics and am delighted with the results and the advice from it. 5i has been a big part of that, giving me the insight, information and confidence to make mostly good decisions.

I originally put a 30% allocation for bonds when I started 4 years ago, mostly because that's what was usually advised for those in my position (about 10 years out from retirement).

However, I have put no new money into bonds over that time because the ones I own have been the worst part of my portfolio. They did not act as ballast when the market went down - they seemed more volatile than most of my conservative equities. They also did not go up appreciatively when interest rates rose, and overall, even with the payouts, I'm in the red on these bonds over the past 4 years.

I heard you mention bonds in asset allocation on the recent podcast but I didn't sense any great endorsement of them. Other than the traditionally recommended 60-40 or 70-30 split, can you offer reasons not to sell them off and buy conservative stocks like CN, CSU, BN, etc or else broad-based index funds like XIC, XUU etc.?

Q: On Dec 28 you responded to a question from Cal about covered call bond funds, and made a recommendation as he requested. However, in your comments I got the impression that you felt now may not be the right time to buy this type of fund due to the potential for higher bond prices and lower yields over the coming months. Looking at the 2 noted above, and assuming rates do start to slide down a bit, what would you expect to happen to the ETF price and the distribution? Would you be a buyer today?
Thank-you

Q: Hello 5i,

Our portfolios initiated positions of TLT, VCLT, IEF, VCIT, and VAB ~2 months ago. TLT and VCLT are each at 2% of the portfolio. VAB, IEF, VCIT combined are 3%.

We will add additional funding to the ETF's. Would you recommend an increase across the board or should we focus our increase on TLT, VCLT, and VAB based on the latest talk about lowering rates?

Note: We are treating the ETF's as a stock as we have GIC's through to 2028 as our fixed income (15%). What are the triggers to indicate that the ETF's are reaching the end of the runway and a switch to individual stocks is recommended?

Thank you for your great service and Merry Christmas.

D&J

Q: my position in XLB:CA has almost recovered to break even. i am adjusting my behaviour in investing to try to avoid betting on conditions such as rising , falling, or staying near current for longer. I am getting the feeling from comments that long bonds are a play on rates dropping. If this is true, i would rather be positioned in bonds for more balanced risk/return regardless of rates. Any suggestions ?
Many thanks for your great service!