Q: Hi, Pat. My question relates to the Horizons Active Preferred Share ETF. Compared to holding the preferred shares of individual companies, does an ETF like this provide any advantages? Is this the best one to buy if you want to buy such an ETF? Thanks!

A: Preferred shares behave more like long-term fixed-income instruments rather than short-term instruments. So while short-term interest rates are still relatively low, the outlook for long-term interest rates is less certain.

The underlying credit quality of preferred share issuers can be a negative factor in some… Read More

Two of these three Canadian ETFs are buys

Two of these three Canadian ETFs are buys

Here are three ETFs that mostly hold high-quality stocks widely traded on Canadian exchanges. Each fund mirrors the performance of a major stock index or sub-index.  That’s different from ETFs focused on narrower indexes or themes such as biotechnology or solar power.

While you do pay… Read More

Pat: What is your view on buying the Canadian Vector Equity Fund? I believe it’s tilted towards value stocks and small cap stocks. Its MER is higher than an ETF, but maybe the value and small-company approach over long periods of time will add value. What are your thoughts on going with this mutual fund or a small-cap ETF such as the iShares S&P/TSX SmallCap Index ETF?

A: On a broad level, funds that specialize in small-cap stocks are always more volatile. However, some small caps do offer above-average potential—like those we recommend in Stock Pickers Digest.
Incidentally, we think it’s a mistake to generalize about small cap stocks. Some small caps are… Read More

Two bond ETFs for stable income

Two bond ETFs for stable income

For investors who need stable income and want to hold bonds, these two bond funds offer relatively low fees and high-quality holdings.

The Bank of Canada is unlikely to raise interest rates any time soon. That’s because low prices for oil and… Read More