Investment Q&A

Q: I just upgraded to portfolio analytics and one of the suggested is upping my US market exposure plus adding to Healthcare and Industrials. I was looking at the XGI, ZUH, HHL to do this but am open to other suggestions.

Q: My 50 year young daughter is adding $100,000 to a balanced $1m conservative portfolio. Which 2 or 3 etfs (your suggestion or ours) would you suggest that fit a post pandemic world.

Q: What Canadian ETF would you recommend for exposure to Biotech?

Q: Hi 5i,
Further to my previous question about return of capital, you mention that some investors, over time, can see their adjusted cost base go to zero as result of return of capital. What does this signify, that you now own it for $0 cost. Would the investor expect share prices to be severely impaired?
I am trying to decide if one of these health funds might be a lower risk way to generate some stable income while providing lower risk to principal.

Thx
Jim

Q: Hi,
Could you recommend a Canadian ETF which covers international tech companies with no or very little Canadian or American content.
In the healthcare field which one would you recommend between XHC and ZUH?
Finally what is your opinion of HHL and LIFE.
Thank you. Steve

Q: What portion of FHI distribution is return of capital? What would be your order of choice among LIFE; FHI; and HHL ?

Q: Hi Peter and Team,
Over the last 5 years, HHL's price dropped by just under 30% although its underlying stocks had appreciated over the same time period. I just can't wrap my head around this and would you please comment on how this is possible.
Also which one would be your choice for a full position HHL vs LIFE?
Regards,

Q: Hello 5i,
Two questions (or maybe its three...) this morning so please deduct points accordingly (all arising out of Portfolio Analytics indicating I need to increase my US exposure and also my tech and health care holdings - all of which I'd like to do while staying on the TSX).
First regarding tech, each of TXF or TXF.B appear on their face to be promising investments, for their distributions if nothing else. Although the MERs are a little high, and net asset values and volumes are low, are there reasons why a buy and hold (3 to 5 years) in either is not a wise choice? And if a buy is warranted, the hedged or the unhedged?
Second, regarding health care I'm looking at HHL and HIG and would appreciate your thoughts on their comparative merits - and also to be told if you think either or both are best kept away from - again with a 3 to 5 year hold in mind.
As a wrap to all the above, if you think the ETFs I've asked about are best avoided for the 3 to 5 year term I've got in mind, can you offer some alternatives?
And finally just a comment: Portfolio Analytics has really allowed me to step back and get a much better objective look at my investments which had gotten spread all over the board and need some discipline, and has given me both the tools and the confidence to structure them (I think and hope!) securely and profitably.
Very glad I found you. I gave a year of 5i to my son recently and I hope he uses it a lot - did you get that Geoffrey?
Thanks for everything.
Peter

Q: May I please have your opinion of HHL (Healthcare Leaders Income). Thank you.

Q: Can you please comment on HHL. This ETF pays a dividend of about 9% and seems to be very stable. My only other healthcare holding is a small position in WELL. Should HHL be held in my RSP, TFSA or CASH account.
Thanks!

Q: As per my portfolio analysis I have reduced my position in tech and industrial. One area Where I don’t have an investment I.e. communication services I’ve taken A partial position in BCE. I need to add health care. What is your opinion of the above? What would be your top pick in this area.

Q: Retired dividend-income investor. Sitting on 6% cash. Looking to add to healthcare exposure in my portfolio. Do you still prefer LIFE over HHL? Would you buy now or would you wait until after the USA election? Thanks...Steve

Q: I have positions in several ETFs trading on the TSE. I like to keep up to date on major holding changes and weightings within each ETF. Is there a good (one stop shop) source of updated information, other than going on to the separate ETF company websites?

Q: Hello,

Thank you for your very prompt response to my question concerning how this ETF is able to pay such a high distribution. I now however have a few follow-on questions.

Since you indicated that a vast percentage of the distribution the ETF paid in the past year was simply a return of investors capital, wouldn't that make the likelihood of the ETF being able to continue payment of the current high yield very suspect over a rather short period of time? If investors are predominantly receiving a return of their own capital back to them, over time, then at a rate of 9% plus per year, won't the fund simply run out of funds to make these payments with over a period of 10 or so years? How would this differ from putting one's money under the mattress and simply withdrawing 10% of it each year?

Does the Evolve Global Healthcare (LIFE) ETF also engage in this practice, in order to support its roughly 6.75% yield?

If ETFs are supporting high yields by returning investor's capital to them and if that practice is inherently unsustainable, then I imagine that including information of that nature in the answer to any and all inquiries about such ETFs, would be very beneficial to all your members.

Thank you

Q: Hi,

I'm wondering if you might be able to provide me with some insight as to how you believe the Harvest Healthcare Leaders ETF appears to be able to sustain a yield of over 9%, when the vast majority of the investments it holds don't pay a dividend of anything close to that level of return and in fact in some cases pay no dividend at all?

I understand that they write covered calls on up to 33% of the portfolio but the difference between the return being paid by this ETF and the investments it holds seems too vast for those premiums to be able to make up all the difference. Am I perhaps mistaken in that belief or might this ETF being sustaining its current payout on "borrowed time"? I cannot afford any more investments like CPG or VET or any other examples of times I've reached for yield only to end up losing a massive percentage of my very hard earned money.

Thank you!

Q: I am considering buying LIFE, or maybe HHL. I understand the "withholding tax" issue is best handled by having these ETFs being held within ones RRSP.

A clarification question = If the foreign country withholds income taxes, is this reconciled at the time of filing ones income tax? I thought there was a tax agreement or tax treaty that ensured there was no double taxation. So if one paid taxes to the USA on a certain investment, then you didn't have to pay taxes also in Canada...in other words...no double jeopardy. Or...is my understanding incorrect?

The reason I ask is I like the way my portfolio is constructed and have the funds available to purchase either of these ETFs from within my Cash account.

Thanks for your help...much appreciated...Steve

Q: Retired dividend-income investor with minimal healthcare exposure (2% of equities). If I wanted to increase my health care exposure via an ETF and receive a dividend, which ETF would you chose? Which type of account would you buy them in...RRSP, TFSA or Cash (I'm thinking about income tax implications and USA withholding issues)? In a previous comparison, you indicated you preferred LIFE over HHL, although in another question you preferred XHC overall. I am sitting on roughly 8% cash and currently think I may wait for 2nd Qtr earnings to unfold, or possibly wait until the USA election...I know this is market timing, but I just don't trust where we are at right now. Once Q2 earnings are in, I might invest the $/month over the next 6 months strategy.

So, which ETF would you choose and would you wait for Q2 earnings to be done?

Thanks...Steve

Q: Would you prefer HHL or LIFE as a potential investment? Income is a significant consideration for me. Thanks.

Q: Would you buy either one of these company's?

Q: Hi 5i team
What are your top picks for Global/US health care sector ETFs that are listed on TSX , for non hedged and for hedged? Are these better to be in non registered account?
Many thanks.