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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: Hello,

I am concerned in a rising interest rate environment CBO (5.0%), CPD (1.92%), XHY (7.4%), VAB (4.13%) are positions that need to change in my portfolio. Portfolio Analytics recommends holding 35% in fixed income. I currently hold about 18%.

Should I be selling some or all of these positions and then re-investing in other fixed income vehicles given the rising interest rates?

I would appreciate your feedback/suggestions on current position. Thanks again for all your great service.

Read Answer Asked by Mauro on November 08, 2021

Q: I submitted a previous question about my sister converting her portfolio from a robo manager to self-directed. The last question dealt with the equities side (75%) while this one deals with the fixed income side (25%).

My suggestions to her all come from what I've gleaned from your website, so I'm really asking for confirmation and criticism here.

She wants 10% in gold so I've recommended 5% of Sprott's PHYS.TO and 5% of AEM.TO. We realize these are not fixed income but plan to use them as a long term hold (insurance) and not speculatively. For other 15%, I have suggested VAB.TO and XSB.TO.

Some of her funds are in USD so she could buy US or Global bonds if that would add safety. It seems that would complicate things unnecessarily, a main objective being to keep it simple.

Read Answer Asked by Kevin on August 06, 2021

Q: About 25% of my portfolio is in cash, enough for 5 years of cash needs. The problem is that it earns only 0.2%. Now I am thinking of putting this cash in 5 or more high quality Bond ETFs. Is this a right move? If so, could you give few names? Thanks.

Read Answer Asked by Sudhir on June 11, 2021

Q: Hello,
I am nearing retirement. I have CBO, CPD, VAB and XHY at 20% of my fixed income portfolio. All these ETF's exist in my unregistered account. I wanted to add XBB in my RRSP account. Any concerns about too much overlap by adding this position? This will add 7% to my fixed income position. Portfolio analytics recommends a 30% position.

Thanks for all your help.

Read Answer Asked by Mauro on June 02, 2021

Q: What are the best bond etfs to own in Canada and US in your opinion? Please provide several options in both countries. Thank You.

Read Answer Asked by Mirjana on October 14, 2020

Q: Hi Team,
Is there a ETF similar to VGRO but sold in $US without converting to Cdn? I have some cash on the US side of my RRSP and like the set up of VGRO but would rather not convert back to Cdn at this point.

Read Answer Asked by Todd on September 08, 2020

Q: I am planning to increase my bond exposure in my RIF and have looked at VBU. I already have Canadian bond exposure. This is a hedged fund. Is this, as a hedged fund, appropriate for my RIF? Is there an unhedged equivalent? Do you have other funds I should review?

Thanks

Read Answer Asked by Ronald on July 17, 2020

Q: I sold my business and started investing last year. I am trying to build balanced portfolio and struggling with the bond portion. I don't want to buy individual bonds and was looking into something like HBB for unregistered portfolio and VAB and XSB for registered. Yet, I am very uneasy about buying bond ETFs in the near-zero interest rate environment - the rates can only go up (unless we end-up with negative rates here) and, obviously, bond ETFs will be going in the opposite direction. I was thinking about VSC but almost 35% of it are junk bonds, so no comfort there. With PSA now paying only 0.65%, I am really out of choices for the fixed income portion of my portfolio. Any suggestions (both for CDN and USD positions)? My time horizon is 10 years and I want something safe and tax efficient.

Read Answer Asked by Marie on July 03, 2020

Q: I like the Vanguard family of ETFs and am looking for safe income in these uncertain times. I am aware of VBAL and VGRO, but could you suggest other Vanguard offerings that focus on earning investors relatively safe distributions. If there are other companies that offer superior ETFs for income I would appreciate your suggestions.

Read Answer Asked by Les on June 17, 2020

Q: My adult son (Canadian citizen/resident) is in his early 30's, has maxed out his RSP and TFSA (he holds high-quality individual securities within these accounts, which have done well over the years), and he is lucky to have a high-paying job in which he has surplus funds (Canadian dollars) that he can invest, within a non-registered account, approx. $20k to $25k per month. The goal is long-term growth, aggressive (80% equities), with the possibility that he may need some of the funds within the next 3-5 years, to join a group practice (capital contribution toward partnership). My advice to him is that he purchase each month among the five following ETFs (% as indicated below), rebalancing as he makes new monthly contributions:
20% VAB = Vanguard Canadian Aggregate Bond Index ETF;
20% ZCN = BMO S&P/TSX Capped Composite Index ETF;
25% VFV = Vanguard S&P 500;
25% TPE = TD International Equity Index ETF;
10% ZEM = BMO MSCI Emerging Markets Index ETF.
What do you think of these 5 particular funds and the overall allocation? For his situation, are there different ETFs you might suggest we look at that would be better-suited for his situation? Thank you.

Read Answer Asked by Ted on January 07, 2020

Q: Hi
I am looking to add a bond etf to my portfolio. I am looking for something with a reasonable yield, that is defensive with some possible growth opportunities. Could you recommend the one that fits that those criterion or if you have a better choice, I would appreciate it. Thanks

Read Answer Asked by Leonard on November 07, 2019

Q: Hi 5i team,
Group A: XCV 35%, VVL 35%, VEE 10%, VAB 20%
Group B: VSB 15%, ZPS 15%, XSB 15%, XIU 30%, VCE 20%, XAW 5%
For short term 2-3 years, which group would you pick? or any better idea?

Read Answer Asked by Eli on September 30, 2019

Q: How can I make XTR, CDZ, IGRO, CLF & VAB tax efficient? Which should be held in registered accounts and which in non registered accounts and why?
Thanks
F

Read Answer Asked by Frank on July 16, 2019

Q: For the purpose of simplicity I would like your opinion on these 3 ETF portfolios.
My idea is to rebalance 1 / year.
non registered: VFV 30% VDU 30% VAB 40%
TFSA: VFV 50% VDU 50%
RRSP: VOO 30% VIG 30% IWO 30% VAB 10%
Any suggestions as to changing the etf's used for better tax purposes ?
Are there better etf's that you would recommend using?
Thanks for your help .
Victoria

Read Answer Asked by Victoria on June 05, 2019

Q: Hello,
I own both of these ETF's in my RRSP. The position in VAB is higher by 3 fold as compared to XLB.
I will be adding to one of these with my 2019 contribution. Given the outlook for rates (I lean towards the notion that they have most likely peaked), I was going to increase my position in XLB. Would you agree with this decision or would you favor VAB? As background, I am retiring in 13 years if that helps.
Secondly, do you view preferred shares and corporate bonds issued by public companies comparable in terms of asset categories? Both respond for the most part to movements in interest rates as best I can tell but would like to get your opinion please.

Thanks,

Dan

Read Answer Asked by Daniel on May 27, 2019

Q: Hello,

I am currently looking to increase my fixed income exposure by $70,000. I currently hold the above 4 Fixed income ETF's. Each one represents less than 5% of my overall portfolio. I am looking for growth. Your suggestions would be much appreciated.
Thanks.

Read Answer Asked by Mauro on April 25, 2019

Q: A lot of research and writing has addressed the reality that it is *very* hard for an active fund manager/stock picker to beat the indices on an after-fee basis.

But what about the bond market? Does 5i know of a body of research/evidence that explores whether or not over time, an active bond trader/manager could beat a passive bond index fund such as XBB/VAB/ZAG? Should I go passive or active with my fixed income allocation? Which actively managed fixed income ETFs do you like, if any?

Thank you.

Read Answer Asked by Walter on March 18, 2019