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Time to dip into the mailbox to answer more questions from readers.
Q – I have benefited from investing in U.S. stocks, which form a significant portion of my portfolio. Lately, I have been reading more about the decline of the U.S. position in the world related to many aspects (spiralling debt, degradation of democracy, Iran war).
As confidence in the U.S. may erode in the future, I worry about a flight of capital, loss of reserve currency status, and safety of my investments. I am concerned that Canadian investments may be taken down with the U.S.
In addition to gold, I was looking for other ways to add diversity (currency and geographic) to my portfolio. Would you recommend to your readers a Europe and Asia ETF as a way to add stability and safety? Thank you very much. – Paul H., Victoria, BC
A – My view of U.S. markets is more optimistic than yours, but I have always encouraged geographic diversity. Here are some examples that are tracked on my Internet Wealth Builder newsletter recommended list.
It’s worth noting that all these ETFs were trading at higher levels prior to the start of the Iran war. That conflict will continue to exert pressure on global securities, so you may wish to use a dollar-cost averaging approach when making any purchases.
Q – I’m wondering about the pros and cons of holding FTN.PR.A as part of one’s fixed income portion, or do you consider this fixed income? Thank you. – Jim C.
A – FTN is the trading symbol for Financial 15 Split Corp. It operates a portfolio that consists of 15 financial services companies in Canada and the U.S. The fund offers two classes of shares: Class A (TSX: FTN-T) and a preferred share (TSX: FTN.PR.A), which is the one to which you refer.
The objective of the preferreds is to provide investors with monthly cash dividends, currently $0.06042. The yield is 6.8% annually based on a recent price of $10.70. Like other fixed-income instruments, preferred shareholders do not generally expect to generate capital gains or losses, but they do expect to receive their initial investment back upon termination (which could be many years in the future).
The Class A share investor would typically participate in any capital gain or loss in the portfolio and any additional dividends or income generated on the underlying securities. Currently, the Class A shares pay $0.1257 a month, to yield 16%, based on a price of $9.43.
The numbers suggest the Class A shares would be more rewarding in the long run. But they are also more volatile. During the Great Financial Crisis, these shares lost 83% of their value between February 2007 and February 2009.
If you want steady income and relative price stability, choose the preferreds.
Q – I have 30% of my RRIF invested in BMO Aggregate Bond Index ETF (TSX: ZAG). A large majority of the rest is in dividend-paying Canadian equities such as banks and energy.
I’m new to bond investing. I want something that pays a decent return and I don’t have to worry about. Unfortunately, I bought a large chunk of ZAG last year, before Trump slapped tariffs on the world. There was a lot of angst in markets. So, my average cost is high. I have bought more to average down since.
Do you have any suggestions? Should I hang on, choose a different ETF, or continue to average down and build it up as I age? – Paul C., Victoria
A – This fund is designed to replicate the performance of the FTSE Canada Universe Bond Index, net of expenses. It invests in a variety of debt securities primarily with a term to maturity of greater than one year. Securities held are a broad measure of the Canadian investment-grade fixed income market consisting of federal, provincial, and corporate bonds. In short, you’re investing in the total market of investment-grade bonds.
It hasn’t been a very rewarding experience. The fund produced a return of 0.31% in the year to April 30. The 10-year average annual compound rate of return was 1.68%.
It’s worth noting that the 10-year average annual returns haven’t kept up with inflation. I suggest you consider diversifying your bond holdings to improve your fixed income returns. One possibility is to add units of the iShares Core Canadian Corporate Bond ETF (TSX: XCB). It produced a total return of 3.46% in the year to April 30. The 10-year average annual compound rate of return is 2.75%. You sacrifice a little safety but get a significant uptick in return as compensation.
Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.
Follow Gordon Pape on X at X.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.
For more information and details on how to subscribe to Gordon’s newsletters, go to www.buildingwealth.ca/subscribe.
Notes and Disclaimer
Content © 2026 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.
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