Investment Q&A

Q: I am looking to diversify to more reasonably valued markets. I already own North American and European stocks / ETF's. So I want to increase my Emerging markets portfolio weighting. I own VWO (heavy Chinese component) and also ZID, so I would like even more diversification in S.E. Asia.

You've recently answered a question about EWY and mentioned how reasonably priced it was. Would EWS also be good value right now (i.e. P/E, P/S) ? Is 6% the correct dividend yield for that ETF, and are there any taxes withheld if it is part of one's RRSP ?

Q: In what way is it advantageous to buy VEE vs. the underlying VWO? VEE indicated yield is 2.16%, VWO is 2.62%.
I realize one is Canadian listed, the other American, and it may depend on the holding account. Please explain the mechanics.
Thanks, love your service.
Len

Q: Hi 5i,
Thinking of selling VXUS and buying VEA, VWO, DIM, DLS in its place to gain wider exposure to international stocks, what do you think of this idea. I will be able to control percentages in various market cap. companies too.

Q: I am trying to find a good Emerging Markets Value ETF. I'm looking for something to compliment VWO which I already have. I see Pimco has an ETF PEIFX but I can't find much trading information on this one when I am on the Yahoo Canada site. Is there something similar that you might recommend ?

Q: FRDM-NYSE - FREEDOM 100 EMERGING MARKETS ETF

I like the looks of this ETF.
It seems to provide a good compliment to my VWO.
However, do you have any opinion?

Q: My sister just pulled out of Questrade's Robo account to a self-directed account. She planned to buy basic 4 index ETFs in order to keep things simple (XIC for Canadian (30%), XUU for US (35%), VIU for Europe (20%), and VEE for emerging markets (15%)).

However, when the funds appeared, we found two thirds of it was in CAD and one third in USD. It seems inefficient to convert it back to CAD and buy those funds. So we're thinking of buying the US equivalent ETFs for XUU and perhaps VIU and VEE.

Can you give us the US equivalents of these funds. If you have any advice on our strategy here or the funds I've mention (eg. whether iShares or Vanguard is preferable in these areas) feel free to add your wisdom which I so much value as a member.

Q: Would you have an opinion on the Global X FTSE Southeast Asia ETF? I already have VWO and would like to add more Emerging Markets, less some China - which seems to dominate VWO. I also do own ZID which gives me exposure to India.

Q: Hello.
I’m interested in adding emerging market exposure. Please provide your top etf picks
(USD and CAD).
Thanks.
James.

Q: Would this portfolio held in RRIF have withholding tax on dividends. Does this look like a good portfolio?

Q: Hi, currently holding VGG, VEE, and XEF. Since the CAD$ has rallied against the USD, would you switch these cad etfs to US etfs now for the lower MER going forward? How big of a difference would this make in the the long term, say 20 years assuming all other variables stay the same? These are long term core holdings for me. All in RSP and only fees would be commission on the sale and of course one time FX conversion. What would be the best US etf to replace XEF and VEE? Thanks!

Q: Hello 5i,
I a question on Sunday which hasn't been answered so I will try again. In a recent article which you generously shared with us on Nov 13, entitled, "You May Regret Staying in US Stocks" the author says that a good number of US investment managers are in agreement that for various reasons, US stocks will not be growing as fast as international stocks in the future. I was wondering whether you agree with this thesis? Also, do you think that the etf"s mentionned above will cover what is needed, or should I look at others? I will not be going out and selling all of my US stocks if this thesis is correct. But, I am low on my international section anyway. But, I have been hesitant to add to them.
thanks very much

Q: hello 5i team
i just read one of the articles you recommended to us stating that the consensus amongst money managers is that European stocks will do better than US stocks in the coming years. they give various reasons for this view. i was wondering what your thoughts were on this thesis. i am a little light on foreign equities but have been a bit hesitant to add any. But now i am rethinking this. if you see this as more or less an accurate perception of the investing reality today would you think that the etf’s mentionned would provide the coverage needed?
as always thanks for your expertise

Q: Greetings to all,

We wish to increase our Emerging market holdings within our RRSP account
and note that the 10 year chart has traded between $50 and $30. The yield at the moment is about 2.8%.

Q1: Therefore what kind of holding is VWO, growth or income? I suspect neither.
Q2: Is there an emerging market ETF out there with a generally ascending 10 year chart line?

Cheers!

Q: Thanks for the presentations at the Canadian Fin. Summit.

My question is regarding taxation of ETF's. I'd like to know if I understood correctly. I have VWO, GDXJ and ZID all in my RRSP (USD and CAD accounts respectively). Are you advising that they should be moved to non-registered accounts?

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.

Q: Hi 5i team,
I would like to have emerging markets equity exposure within my RRSP. Currently, my RRSP holds mostly US situs securities in a U.S. dollar brokerage account (TD-Waterhouse). I am debating between buying VWO (trades in US$) or ZEM (trades in CAD$). I use Norbert’s gambit to convert between currencies, so doesn’t matter so much if I make conversion now (from US$ to CAD$, if I buy ZEM now) or later when I need to withdraw the funds (if I buy VWO now, raising US$ from sale of US$ securities already held, and later converting to CAD$ when funds required for RSP withdrawal). Any emerging markets ETF(s) purchased now would likely be held at least 10 years (potentially, much longer, depending on longevity—spouse and I are both aged 60). One other consideration; we are HNW situation, so US estate tax considerations potentially in play, too (depending on U.S. laws at time of our demise, and specific holdings owned at that time; this consideration would favor ZEM). My question—given the above considerations (currencies, fees within RSP, estate)--which one of these two ETFs would you recommend for long-term emerging markets exposure within an RSP (or, if there is another ETF you would recommend for long-term RSP holding for emerging markets, which would it be, given the above situation?).

Q: Hello -
Over the first decade this century emerging markets seemed to do relatively well. Over the last 10 years or so, it appears that relative performance has been much better in the U.S.

Do you believe Emerging Markets represent good value compared to the U.S.? For instance, VWO has a PE ratio of 13, ERUS is about 7, whereas I think the U.S. is somewhere around 18 - you can correct me if I'm wrong. How much affect does a strong USD play in this recent past 10-year performance? Assuming we see a weakening USD, would that be the trigger point for the two mentioned ETF's to outperform the U.S. indices? Obviously stronger oil prices would also likely help ERUS.

What affect would this also have on BNS with it's exposure to Latin America? It's been the weak sister among the big Canadian banks. Would a weaker USD then give the BNS stock price a boost as a result?

Q: Good morning, Peter/Ryan!
I am interested in finding more detailed info about European and emerging market dividend paying stocks, essentially of the "blue chip" variety. Do you know of any specific resources that provides coverage in that area? As well, would you by chance have any recommendations of specific stocks and/or ETFs along those lines … maybe 4 or 5?
Thanks a lot!
Paul

Q: My son approached me on some advice on investing. He is just starting off. My inclination is to suggest to him to stick to ETFs. Ideally a mix of CDN, US, Bond and International oriented ETFs . I have my preferences, but would like to know what you would suggest? I am guessing he is looking at a year window to start.

Q: I want to invest approx 10,000.US in China. Is FXI a good choice ...another suggestion like a Vanguard fund ?
Thanks for your excellent work. Helen