Investment Q&A

Q: Dear 5i team.

Are the holdings in these two different enough to hold both? Is the lower mer of life good enough reason to only own it?
Understanding that they are covered call etfs, which non covered call etf would compliment them best to gain upside to sector rallies?

Thanks for your insights.

Q: Hi 5i, we need to increase our Healthcare allocation.

Currently hold XLV in our non-reg account, and are satisfied with it.

We need to use CA$ funds in our RIF's to increase, and are looking
at HHL, XHC, and LIFE (little unsure with LIFE as their website has faulty info).

We are looking for income plus some growth.

Could you provide some analysis of these 3 options,
and any other suggestions that you might see.

Thanks as always for your assistance. T.

Q: Are these ETFs worth holding for income in a diversified portfolio? I realize that the covered call strategy limits the upside potential.

Q: Would like to get your view on ETFs that use covered call options to enhance returns. As interest rates plateau and eventually begin to fall is there anything 'in general' that we can expect from these ETFs? Will the share price increase, like bonds, to bring yields more inline with expectations or is the share price more influenced by the underlying share prices of the stocks held in the ETFs?

Q: Retired, dividend-income investor. I have funds available over time to invest in / top-up some of my positions to meet long term asset allocation targets. I plan on continuing to invest these funds over a number of months...as I have been over the past 8 months.

The question is = in what order do I buy the following = XST, XIT (several BNN-ers say to avoid adding to technology at this point), BCE, BNS, LIFE, ZUT.

One method is to wait for these securities to hit my price targets (based on hitting a combination of fundamental and technical targets (a little bit is kind of bottom-feeding).

A 2nd method is looking at setting the order of buying, based on where one thinks each security is relative to their historic value.

Ignore asset allocation...these are smaller amounts and the AA is reasonably good right now.

My suggested order, subject to where each security's price is at (please shoot holes in my plan):
Sept = BNS,
Oct = XST-#1 (in 2 tranches-spread out),
Nov = ZUT-#1 (ditto),
Dec = XIT-#1 (ditto),
Jan = XST-#2,
Feb = ZUT-#2,
Mar = XIT-#2,
As each hits their price target (minor adds) = BCE, LIFE.

Please state your order and why.
Thanks...much appreciated...Steve

Q: hello 5i:
I'm looking for ideas for a covered call health care etf in US dollars. LIFE.B seems to be a little to thinly traded, so something other than this? If choices are very limited, would a general etf like SCHD or DIVO be the next best option?
thanks
Paul L

Q: Retired, dividend-income investor. At what point does liquidity become an issue? I currently own 4000+ shares of LIFE and am considering adding another 500 shares. I believe that LIFE trades roughly 9000 shares/day.

LIFE is my proxy for the HC sector and it is my intent to hold for the long term. I know I could buy another HC ETF, like HHL. However I run a concentrated portfolio.

Thoughts? Thanks....Steve

Q: I manage my daughter and her husband's investments. They currently own the above equities (except XST), plus fixed income. I would define them as conservative investors.

Regarding their asset allocation, I am still in the process of building out their portfolio. They are a little light on Consumer Staples. I was trying to find a suitable ETF and came up with XST.

Q#1 = What are your current thoughts on XST? The constituent holdings actually look pretty good. The various rates of return also look good.

Q#2 = Are there other ETFs that I should consider? I couldn't find a BMO version. I have read the past questions on XST and it appears to me that XST is the front runner (compared to VDC and XLP), when looking at past performance.

Thoughts? Agree?
Thanks for your help...much appreciated...Steve

Q: Do you think it worthwhile to buy both of these holdings (i.e. 3-4% each in an otherwise reasonably well-diversified portfolio) for the sake of making the best use of their respective growth/dividend potential? Their high degree of correlation seems the one factor mitigating against this strategy.

Q: Although you refer to LIFE in answer to questions about the ETF I am assuming as usual you prefer the unhedged LIFE.B for the usual reasons

Q: Retired, dividend-income investor. I hold the Evolve ETF called LIFE. It is my proxy for the Health Care sector and have 7% of my equity portfolio in LIFE.

I just read the April 21/23 question by Michael regarding the Cease Trade Order on 11 Evolve ETFs.

The article did not specifically mention LIFE, but I wanted to check with you that there was 0% chance of a spillover impacting LIFE. In other words, I wouldn't need to flush my LIFE holding and buy a similar product, like HHL.

Thanks for your help...Steve

Q: I have been fortunate to come into a windfall of cash from a relative, and I am interested in taking new positions in the following securities with this new cash. Please note, my existing portfolio is fairly well diversified across all sectors in North America.

Can I please get your long-term opinion on these new securities I wish to invest in. Do you see any issues with respect to these investment choices? I have money to invest and feel the urge to plunge into the market at this time.

CSH.UN, MRC, ALA, MPCT.UN, TRP, CVS, LIFE.U, TEVA

Thanks

George

Q: Hi 5i,
Do you still favour LIFE over DHT.un? And what about holding both in a TFSA?
And what is your opinion of PPL? It never goes up? I also have ENB but they have the underwater pipeline issue. What would be alternatives?
Many thanks for your patience and great suggestions.
Connie

Q: hello 5i:
recently, I asked a question about LIFE; thanks for the quick response. In hindsight, what I should have asked might have been: which covered call ETF, in the health care space, provides the best dividend rate, with the lowest return of capital. As we're dealing in registered accounts, return of capital is not of interest to me.
thanks
Paul L

Q: hello 5i:
nice yield, price has come down in the last year so more attractive. Of the yield, how much is return of capital, over the years? Is it significant, in your opinion?
thanks
Paul L

Q: Hello 5i,
I have reviewed the questions on these two ETF's and I would like to confirm my thinking. I need to increase both my international and U.S. sectors, one more than the other. As I understand it, if I purchase LIFE, then my international sector would improve over HHL and if I purchase HHL, then my U.S. sector would improve over LIFE. Beyond geographic sector allocation I am largely indifferent albeit with a slight preference for HHL more due to its MER more than anything else.
So, are my assumptions correct and would you have anything further to add in terms of preferring one over the other that I may have overlooked?
Many thanks as always!!!
Cheers,
Mike

Q: I know that you have suggested the US for healthcare sector exposure given the somewhat limited opportunities in Canada. I struggle a bit with the single company risks in the sector given the possible reversals in fortune with political policy decisions, failures with trials and products in the pipeline, lawsuits etc. etc. Can you suggest two or three ETFs that cover the the entire Healthcare universe (devices, pharmaceuticals, biotech, health insurance carriers and/or whatever else makes up the sector) reasonably well. Thank you!

Q: Looking at 3 very different asset classes that offer high yields and would appreciate your help in sorting which ones offer best risk/ reward.
1. Covered calls: NXF, ZWC, ZWU, LIFE, JEPI;
2. Credit - OCSL, ORCC, MAINMAIN
3. Yield - GCOW, EIT-UN.
Questions: 1. What is your comfort level on risk/reward for any or all;
2. Please choose which are investable with short commentary as to rationale and and target buy prices

Q: Hi, I am interested in Life, in particular the dividend and its's sustainability?
How does this etf compare with IHI? Is Life a product you would be interested in owning for income with some growth potential? Thanks

Q: Hi

Is it time to lighten up on the following and look at growth stock..

In our RRSP we have

LIFE at 5% of the RRSP (still not underwater)
XYLD at 9% of the RRSP
ZWU at 5% of the RRSP

Like the dividend but two holdings are are dropping in valve.

Thank you

Mike