Investment Q&A

Q: Peter
The following are a mix of “fixed” income ETFs listed in the Nat Post's article on Robo-investors from last November sorted by decreasing yield. I am trying to shore up the fixed income portion of my portfolio and unsure of the rationale and safety of these ETFs.

Just how safe are these instruments? If there was a meltdown, could their values collapse accordingly?

At the lower end, isn't just worthwhile to buy a GIC, it looks as if they net bigger returns than the lower return ETFs?

What distribution of these ETF's would you recommend for a retiree portfolio?

ETF Ticker Institution MER% Yield% Net Distribution %

ZHY BMO Corporate Bond 0.55 5.77 5.22
XHY I shares US Bond .66 5.46 4.8
PBD Purpose Total Bond .45 4.47 4.02
CBO I shares 1-5 Yr Corp Bond 0.27 4.1 3.83
XCB I shares Corp Bond .44 3.38 2.94
XBB I shares Univers Bond .33 3.16 2.83
XSB I shares Shrt Term Bd .27 2.91 2.64
VAB Vanguard Ca Bond 0.12 2.71 2.59
VBU Vanguard Us Ag Bond 0.2 2.6 2.4
XRB I shares Real return 0.39 2.4 2.01
VSB Vanguard Shrt Trm Bond 0.1 2.2 2.1
HFR Horizon Float Rate 0.4 2.17 1.77
PSA Purpose High Savings 0.12 1.34 1.22

1 year GIC 1.9%

Regards

Q: Hello.

What would be the impact to Russel Metals if they experienced a decrease in demand for their Energy Products sector? Do you think management would 'adjust' well? Do you see this as a real risk?

Looking at their annual reports & their 3 main segments from 2005 to 2014, revenue has declined from Metals Service and Steel Distributions, while revenue from Energy Products has increased steadily from 23% of revenue in 2005 to 46% in 2014 (Q1-Q3).

Regards, David

Q: Good Morning
I have a self-directed investment account separate from our registered RIF, LIF and TFSA accounts and would like to one day take over management of the registered accounts. I'm wondering whether there would be much difference than the account I have. Do you know of any resource that would help me with the transition and management of the accounts such as annual payout minimums, taxes, etc.? I have not found the banks that helpful.
Thanks for all you do.
Thanks

Q: Given the importance of cyber security this new etf just launched in the us seems like a good place to invest instead of trying to find the right stock. They have 20 stocks in the portfolio including Cisco fire eye Symantec palo networks fortinet. No track record but would you consider it a good bet on cyber security. I am thinking this would be a good place for a percent of my US portfolio.

Q: STN has averaged 17% for last 10 yrs (source: G&M). Total 10 yr. is ~410% - nearly all of this was made in a parabolic move of ~1 ½ yrs starting in mid-2012. Since Sept it has dropped like a rock. Do you suspect it will continue falling this year? (I am interested in growth stocks). Thanks.

Q: I am a dividend investor and use David Stanley's Beat the TSX system which I review each year at this time. TRP is now in the top dividend stocks of the TSX 60. Do you have any concerns about the company going forward in the short term over a year or two?

Q: Just a basic, general question. Do you think currency exchange intl would be a better investment than avigilon (avo), over about a three year time frame, thanks?

Q: Yesterday there was an article in the National Post authored by Peter entitled Five New Things an Investor should try. In the article owning gold bullion was discussed as a hedge. I have several questions:
-Could silver bullion be substituted even though it is somewhat more volatile? If so could you also use a royalty streamer such as SLW be utilized?
-Instead of hedging with gold bullion could one use a streamer such as Franco Nevada?
- Finally do you believe gold has established bottom or do you believe that there is still sufficient risk to wait until a recovery is more certain? I've been waiting to buy for a number of months now as the price fluctuates between $1150 and $1240/oz.
Thanks
Mike
Thanks.
Mike

Q: I am looking to reduce exposure to the utility sector. Could you rank the following BEP.UN BIP.UN AQN CU EMA NPI BLX. Thanks.

Q: Hi there,

I have been following this stock for a bit but am struggling to figure out what is unique about their offering versus all the other payment processors out there. Can you provide some insight. Revenues are certainly growing but this seems to be a crowded field these days - what is their competitive advantage that would interest a long term investor?

Thanks and Happy New Year

Q: In your company reports, in the company report card summary you quote a value for 5 YR ROE. Please clarify if this is the average yearly ROE calculated over a 5 yr. period. If indeed this is an average I would suggest you add additional info as a single average number is next to useless. Ideally, the latest individual values for the past 5 years should be stated or, less at least the average with the min and max value.
Happy New Year to all,
Steve

Q: hello 5i:
I'm currently slightly underweight financials and would like to add to a small holding of FSZ. I've read your reply to a question in December (FSZ vs CF),and am slightly puzzled by the response. FSZ currently trades at a PE of 13.7 vs a normal PE of 21.5 and a cash flow of 15.4 vs a normal of 24.5. This appears, to me, to be much more upside than CF offers. Do I have my figures right? Do you consider FSZ a buy at the moment, or should I be looking to add to positions in BNS, or other areas of the financials that show more opportunity?
thanks
Paul L

Q: Hi.... More of a comment than a question.
Eit.un recently redeemed 20 percent of the units I tendered to their annual voluntary redemption offer. The redemption price per unit exceeded the current market price by $1.45 per share. 20% of $1.45 is 29 cents. The annual Mer on this fund is approximately 25 cents per unit per year.
As a result owners of Eit.un who tender and then re purchase the tendered units get the fund services for free. Cool, eh?

Q: On January 2nd you stated the cumulative contribution limit on a TFSA was $36,500. What am I missing, my calculation puts it at $26,500??
Ed

Q: I realize this is a bit of a wide open question but if you were to recommend 3 Canadian high-growth potential stocks for inclusion in a TFSA account what would be your top picks? Thanks in advance.

Q: Was wondering your thoughts on the greater potential growth TD or C, I know hey are different types of banks but was wondering your thoughts on growth thanks

Q: Most analysts warn that you should never hold leveraged ETF's long term. But I see some very large annual returns that are very close to the "three times" the return of the underlying ETF. Is there anything wrong with setting aside 10% of one's portfolio to try to supersize returns in sectors of high conviction. I am thinking of FAS (financials), TECL (technology) and CURE (healthcare).

Q: I note that VUS appears to use derivatives to underpin its investments. Given the role played by derivatives in the 2008 debacle, how safe is this ETF?

Q: Hi Everyone and Happy New Year to All
I am hoping you can help with an analysis of CSU.My broker shows expected earnings for 2015 of $15.09 although that is up from 14.89 60 days ago.Is this what you are expecting? Also I am wondering what cash flow number you expect.
Is cash flow a better figure to look at here? I notice they record Goodwill and Intangibles separately but only amortize Intangibles?
Would a declining Euro have much impact on their numbers?
Many thanks
Mike

Q: I have held on to this stock in order to take the gain in 2015. There was some talk around the time the takeover was announced about an extraordinary dividend upon closing. Do you have any news or information about this? Should I sell or hold on until closing?

Jim