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Time for another look into the inbox to check out your questions.
Q – Recently, you published an article about European stocks. With Trump’s crazy tariffs, do you still stand by your recommendation to increase the European portion of equites vs. U.S. and Canada, even though Europe is going to be hit hard with tariffs? – Arkardy B.
A –Every nation is vulnerable to Mr. Trump’s trade wars, and it’s impossible to predict where this will all end. The outlook for the EU is less encouraging than when I wrote the article, but you could say the same for almost every country on earth.
That said, European stocks have the advantage of being cheaper than U.S. issues, so presumably less vulnerable. The p/e ratio of European STOXX 600 index was 17.44 late last week. By contrast, the S&P 500 has a p/e of 25.10. The S&P/TSX Composite was at 21.17. Apart from the fact geographic diversification is always a good idea, these numbers make a compelling case for Europe offering good value at this time.
Q – I came across iShares S&P Global Base Metals Index ETF – symbol XBM on the TSX. What are your thoughts on this ETF? As always, I look forward to your publications and have used them as the backbone of my portfolios. – Ian B.
A – This ETF did very well in 2020 and 2021 but has been pretty much of a bust since. As of April 30, it was down 11.05% year to date. Since its launch in April 2011, the average annual compound rate of return is only 1.62%. For this, you pay an elevated (for an ETF) management expense ratio of 0.6%. Not recommended.
Q – My sister has just moved back to Canada. She sold her property in the USA and will be receiving US$240,000, in the middle of June.
What is the best way to transfer it to a bank in Canada? Should she convert it all to Canadian while the exchange rate is in her favour?
How do you recommend investing this money?
She is 78 years old and has only her CPP, OAS, and a small amount of U.S. social security as yearly income...about C$25,000. – Susan K.
A – The foreign exchange rate charged by large Canadian banks is quite high. I suggest she look at using one of the currency exchange companies that offer better deals. These include Knightsbridge, Interchange, Kentor, and Wise. She could save several thousand dollars by working with one of them.
As for timing, there’s no way to predict how the CDN-USD exchange rate will fluctuate over the next few months. It was expected that the loonie would decline in value, but it has instead been strengthening recently as U.S. bonds have sold off. I suggest that if she thinks she will need U.S. dollars in the future, she should keep some of the money in American currency and convert the rest. Otherwise, convert now.
Where to invest? It appears she could use some additional income, so I suggest a portfolio of dividend-paying, low risk stocks like banks and utilities, plus some good-quality bonds or bond funds. Ask a financial advisor to create an appropriate portfolio.
Q – I turn 71 this calendar year. I currently have an RRSP, a spousal RRSP, and a LIRA. My question is: Can I combine them into a single RRIF? Also, is there any advantage to move to a RRIF now or wait till the end of the calendar year? – Frank S.
A – One RRIF would be more convenient to manage, but it’s not possible. The spousal RRSP is your wife’s property, not yours, so the RRIF that flows from it must be in her name.
LIRAs (Locked-In Retirement Accounts) are the same as RRSPs in many ways, but they have restrictions on withdrawals. They are usually created from a retirement plan sponsored by a former employer. At age 71, they can be converted to a Life Income Fund (LIF) or an annuity.
As for the second question, you can convert any time this year. The money will remain tax sheltered no matter when the conversion is made, and no withdrawals from your RRIF and LIF will be required until 2026.
Q – I have a significant amount of my investments in preferred shares such as DFN.PR.A. I am happy with the returns, but should I be worried about the possible effect of tariffs? I am 72 this year and looking to preserve capital. – George S.
A – DFN.PR.A is not a preferred share in the traditional meaning of the term. It’s the symbol for the preferred units of what is known as a split corporation. These invest in the stock of conventional dividend-paying companies by creating two baskets of shares. One basket guarantees a dividend payment of a specific amount (the “preferred” shares), while the other generates mainly capital gains.
The split corporation you own is called Dividend 15 Split Corp. It invests in 15 large-cap Canadian companies including banks, insurers, and energy companies. Your units pay a dividend of $0.05 a month ($0.60 a year) to yield 5.8% at the recent price of $10.34.
DFN, and other securities like it, are not directly exposed to tariffs. The underlying companies may be, but that should have no effect on your guaranteed cash flow. But the trading price of these shares will tend to track broad market movements. As of May 23, the price was down about 1.4% year to date.
If you have a money question, send it to me at gordonpape@hotmail.com and write Fund Library Question on the subject line. I can’t promise a personal response, but I’ll answer as many questions as possible in this space.
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 © 2025 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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