The year is almost over and there are still a lot of questions waiting in the email basket, so let’s deal with as many as possible today.
Copper investing
Q – I’m interested in a new ETF, symbol CPCC on the TSX. The ETF is an investment in copper with covered calls. Do you consider this a less volatile way to invest in copper? – Ian B.
A – You’re referring to the Global X Copper Producer Equity Covered Call ETF (CPCC-T), which started trading on Dec. 2, 2025. It invests in a portfolio of the world’s leading copper miners, such as Ivanhoe Mines, First Quantum Minerals, Freeport-McMoRan, Lundin Mining, and Teck Resources.
The managers write covered call options on a portion of the portfolio with the goal of providing a consistent monthly income stream while maintaining long-term growth potential. The management fee is 0.65 per cent, on the high side for an ETF. The management expense ratio will be a little higher, but it’s too soon to establish that.
“Copper is one of the best base metals to take a covered call approach on given its historical volatility,” said Chris McHaney, executive vice president and head of investment management & strategy at Global X. “Supply and demand factors can result in larger month-to-month movements, which options writing strategies can harness to generate above-average option premium yields for investors. Meantime, the long-term trends of AI demand and national security priority mean that investors could expect to be meaningfully rewarded for maintaining a position in this critical mineral.”
It sounds great but we have no evidence yet of how this will work in practice. The first three weeks of trading (Dec. 2-Dec. 24) saw the units gain about 9 per cent, but that’s too small a sample size on which to base a judgement. As of the time of writing, Global X had not yet made a distribution, so we have no idea of the yield investors might expect.
What we do know is that writing covered calls tends to modestly reduce downside risk but also limits upside potential – a fact Global X acknowledges on its website.
So, to answer the question, yes, this ETF should be a less volatile way to invest in copper. Having said that, it will be more volatile that investing in a similarly structured ETF based on banks, utilities, or consumer staples. – G.P.
Constellation Software
Q – What is your outlook for Constellation Software? – A.A.
A – Constellation Software (CSU-T) was one of the year’s major disappointments. The stock is down about 26 per cent year-to-date, as of the close on Dec. 24. I advised readers of my Internet Wealth Builder newsletter to sell positions on Sept. 9 at $3,660, which was slightly below our original recommended price. The stock is currently trading at about $3,316 and trending down. The P/E ratio is 74.62.
I do not suggest taking a position at this time. If you own shares, consult with your adviser. I will monitor the stock going forward but I would need to see a significant turnaround before recommending it again. - G.P.
David Berman: A dip too deep? Why Constellation Software is the stock to watch in 2026
Dominion Energy
Q – I recently bought shares in Dominion Energy (D-N). What is your view of this stock? – Paul P.
A – The company, which was previously named Dominion Resources, is based in Richmond, Virginia and provides electricity services to 3.6 million residential, commercial, industrial, and governmental customers in its home state as well as North and South Carolina. It also distributes natural gas to about 500,000 clients in South Carolina.
The company’s portfolio of assets includes approximately 30.3 GW of electric generating capacity, 10,600 miles of electric transmission lines, and 79,700 miles of electric distribution lines. The company is one of the leading developers and operators of regulated offshore wind and solar power in the U.S.
The stock went into a deep slide when the Federal Reserve Board began raising interest rates after the pandemic. As a result, it’s down 20 per cent over the past five years. However, the share price has been trending higher since the Fed began to lower rates and the shares have gained almost 10 per cent this year.
The shares pay a quarterly dividend of US$0.6675 (US$2.67 a year) to yield 4.5 per cent. That’s a little higher than some comparable U.S. utilities. On the negative side, the dividend has not been increased since the first quarter of 2022.
Overall, I’d rate it a hold. – G.P.
Freehold Royalties
Q - How vulnerable is Freehold Royalties (FRU-T) to a dividend cut such as we saw happen with Northland Power? In your judgment, what would be the alarm bells that might trigger a dividend cut? Would it primarily be a sustained lower price for oil? And if they did cut, would I be correct in assuming we would see a significant share price drop? – Harry S.
A - Freehold has a history of cutting its dividend when the economy slows or petroleum prices drop. The last cut was in early 2020 at the start of the pandemic, when the payout was sliced by almost 72 per cent, from $0.053 to $0.015 per month. The cut didn’t last very long, however; by November 2021 it was back up to six cents a month. It currently sits at nine cents a month ($1.08 per year), where it has been since September 2022.
The steadiness of the dividend over the past three years is encouraging, but history suggests the board of directors would be quick to cut it again if needed. Freehold said the dividend payout ratio in the third quarter was 75 per cent, which suggests no stress on the rate. But Freehold does not use net earnings to calculate the payout ratio. If it did, the payout ratio in the third quarter would be 100 per cent. Instead, the company makes the calculation based on dividends as a percentage of funds from operations. This is not unusual – many companies use this or a similar approach. However, my view is that it presents an overly optimistic view of the payout ratio. It would benefit investors if regulators required all companies to use the same standard.
So, would a dividend hit the stock price? Yes, since the main reason to own the stock is the high yield (currently 7.1 per cent). I suggest you follow the stock closely and be ready to exit if problems develop. A big fall in oil and gas prices, a drop in production, or a rise above 110 per cent in what I consider the “real” payout ratio (based on net earnings) would be a reason to consider selling. – G.P.
Holding MUB
Q - I have been holding the Mackenzie Unrestricted Bond ETF (MUB-T) in my RRIF for several years. It’s my main bond investment despite the red ink for the last four years. Every time I look at alternatives, I find the 4 per cent+ dividend persuasive. After some heavy losses, MUB now is relatively stable. Should I be looking at another bond ETF or just learn to live with the red in my lineup or buy more to cost-average out of the red? – John W.
A – According to Mackenzie, this fund is designed to improve a portfolio’s risk/return profile by minimizing volatility from interest rates or widening credit spreads by tactically adjusting the underlying holdings in the portfolio. The company rates its risk profile as “low”.
The total return over the year to the end of November was 3.8 per cent. But over five years, the average annual compound rate of return was only 1.8 per cent, which is well below inflation.
Distributions are paid monthly and can vary. Over the past year, they have ranged from a low of $0.062 per unit to a high of $0.083. So investors must be flexible if they are relying on this fund for cash flow.
The portfolio includes a high percentage of long-term securities, with 20 per cent of the assets showing maturities of 20 years or more. Those are the riskiest securities to hold when interest rates rise. Also, I feel the fund’s MER of 0.56 per cent is too high in the context of the returns it generates.
To sum up, the fund offers monthly income, but it’s variable. Total return over five years is low. I would recommend looking at other fixed income alternatives before investing more in this one. – G.P.
High-interest accounts
Q - When I have cash in my RRSP that I want to hold how do I get it into the high interest savings accounts you recommend without having to take it out of my RRSP? – Art L.
A – Ask the administrator of your RRSP. The company should have access to at least one and probably more high-interest accounts that can be used by clients. Ask for the one with the best rate. - G.P.
If you have a money question you would like me to address, send it to gordonpape@hotmail.com and write Globe Question on the subject line. I can’t guarantee a personal reply buy I’ll answer the most interesting questions in this space.
Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.