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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: ETF tax advantage question again.
Could you expound on the different types of taxes on XEC which is an Canadian listed ETF holding emerging markets via IEMG vs holding the IEMG directly which you recommend, to be a better holding for tax purposes in an RRSP account and a non registered account?
In both my RRSP and non registered accounts there doesn't appear to be any taxes withheld when looking at the transaction history, just the dividends. Is it taxed before dividends are paid? You say it would save a layer of tax. Is there more then one?
Other then the articles recently read in you Money Saver Magazine and on the ETF newsletter is there anyway of knowing or finding out which ETF's are better suited for each accounts, tax wise? When will Mr. Mahrezs' part 2 of favorite ETFs for individual accounts be published?
Thanks
Jeff
Read Answer Asked by JEFF on February 25, 2019
Q: Comment on Nizar question about a loan for a spousal RRSP contribution:
My bank does the same thing: if you want to borrow money for RRSP contributions you must put it into their funds. I don't know what the rules are for transferring this contribution to your self directed account as it is not appealing to me one bit.
Read Answer Asked by JR on February 25, 2019
Q: What are your asset allocation suggestions for the TSX industry sectors? Thank you
Read Answer Asked by Paul C. on February 25, 2019
Q: Hi, I'm a dividend/ income investor new to 5i and have a question on portfolio allocation % with regards to geographical location. ie - I have ETF's ZWA (USA) at 8.6% and ZWE (Europe) at 5%, (13.6% total ) of my overall portfolio. I have a general rule that no one position should be over 10% and no one sector more than 25% of my portfolio. What is 5i's perspective on this and would your recommendations be higher when you're talking ETF's that hold a basket of stocks?
Read Answer Asked by William on February 25, 2019
Q: In a previous question about ALC you noted that while ALC was not poorly managed there were better companies out there without liquidity issues. I presume you would include CAE as one of those better companies. I bought ALC, post split, (about 5 years ago) and it hasn't done much - I am essentially flat. I have certainly considered selling it but never "pulled the trigger". Unlike yourself I am not really a stock analyst but it seems to me they have been caught up in Trumpian tariff headwinds, weak iron ore prices (a few years ago) and replacing high operating cost (outdated) ships. To some extent the share price also seems to mirror the historical weakness of the Canadian Market versus the strength in the US Market. So far in 2019 the TSX seems to be performing better and the CAD appears to be gaining slightly on the USD. ALC appear to be having trouble replacing their ships as on at least 2 occasions the shipyards have defaulted on the boats. ALC got their money back but the replacement schedule must have been impacted. So, as usual, I am sitting on the fence. My questions...
1) Do you consider CAE to be a much better company that ALC?
2) While both companies are classified Industrial, ALC is more of a classic cyclical Industrial than CAE. In other words do you think ALC should do better if commodities show some strength or the USD shows some weakness?
3) We own 3,900 shares of ALC or about one days average trading volume. Would you have any recommendations about how to sell the shares keeping haircuts to a minimum? Does offering 500 shares at "the bid" at 10 AM make any sense to you? We wouldn't offer the next 500 shares until the first 500 shares were sold. The spread is about 20 cents per share.
Please deduct as may credits as you see fit.
Thanks,
Jim
Read Answer Asked by James on February 25, 2019
Q: 5iResearch is a great service and I really appreciate all the advice subscribers get on individual stocks. Having said that, can I get 5i's opinion on whether it is really possible to outperform the market in the longterm. Most of the literature I have read indicates that buying the S&P500 (ie. a market ETF) is the most time-tested way to be a successful in the markets.
Read Answer Asked by Mike on February 25, 2019
Q: Hi Group if you were to pick an energy name from Pipelines,NG+ Oil companies with a focus on + (Least risk for highest return) who would you go with ?- ok to mention several possibilities

Presently I am retired and have no significant exposure to this sector. Dividend / growth are important factors

Thanks
Read Answer Asked by Terence on February 25, 2019
Q: Hi
I'm trying to reduce the risk in my TSFA with the intent of using ~$60K towards a down-payment for a new home in mid-2020. My plan is to sell most of the current investments and invest the money instead in a much safer income generating ETF, though I'm open minded to where I could invest instead. I've done pretty well on (some) of these investments, but am prepared to sell the winners and losers and cut my losses to move forward and decrease my risk. I'm most concerned about having to sell at an even greater loss when we are ready to buy next year. I've listed my current investments.

Are any of current investments worth holding into for the next 16 months instead of selling now and which ETFs you would consider buying?
I'm planning to sell:
BBU.UN (no loss/gain), CM (up 3%), EMA (up8%) IAN (up200%), XEC (down 5%), LB (no loss/gain)

I'm planning to buy instead XTR.

Please take as many credits as you think fair.

Read Answer Asked by Michael on February 25, 2019
Q: Regarding Jean-Yves XTR question on 22Feb2019, which account should XTR be "best" held in, Non-registered, TFSA or RRSP/RESP, USD non registered, or USD TFSA account? The holder would be 67 year old retiree receiving a DB pension, CPP and a pittance of OAS supplemented with the casual odd bit of cash but reportable income?
Read Answer Asked by William Ross on February 25, 2019
Q: I am looking for dividend income of 5% or more with dividend payment date quarterly in Feb. May,Aug.and Nov. What companies could you recommend? I already have EMA, PWF. I had BMO but sold it as I am quite heavily weighted in financials owning BNS, TD, PWF, GSY,SLF
Many thanks,
Jen
Read Answer Asked by Jennifer on February 25, 2019
Q: With a 20 year time frame, my daughter has some money to invest in her portfolio which consists of:
Canada: PDC (25%) ZAG (30%), Money Market (10%).
US: XUS (20%), ZQQ (5%),
Europe: XEU (10%)
If the US and China reach a trade deal she might move 5% from Money Market to ZEM.
Given that the bull market is long in the tooth, would it make sense to move XUS to VGG? The composition of VGG appears more defensive and the reduction in technology stocks is compensated by her position in ZQQ. Growth has been similar, the dividends and BETA are about the same, and VGG's MER is lower (.08 vs. .11). Your advice would be appreciated.
Read Answer Asked by Ken on February 25, 2019
Q: A couple of recent question have referred to portfolio allocations. In particular, the reduction for SIS from 4.2% to half that amount causes me some concern as that is a fairly serious adjustment. I tend to follow your BE Portfolio and with 25 holdings, my average weight (full position?) is 4%. So with that in mind, my question is should I adjust my allocations to match those in your portfolio and secondly, are there any positions you would be comfortable either underweighting or underweighting at this time?
Read Answer Asked by Michael on February 25, 2019
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