Opinions Larry Berman CFA, CMT, CTA
iShares Cdn Financial Monthly Income ETFFIE.TODON'T BUYSep 30, 2024
$7.87
Stock price when the opinion was issued
$10.64
As of May 29, 2026. Market Open.
E.T.F.'s
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COMMENT
A financial, dividend paying strategy. Has banks, insurance companies and dividend payers. A concentrated investment in financials so keep this in mind for allocation. Around 6% yield. However, underlying is not earning 6%, so there is a return of capital. A tax effective way to get exposure to financials.
E.T.F.'s
COMMENT
There are two elements to covered call strategies. There is the underlying stocks, and then the option premium. Volatility will continue to be high for the next couple years. Premiums will remain elevated. FIE pays back a part of your money back. There are a couple different elements to consider.
Larry Berman CFA, CMT, CTAUnknown
E.T.F.'s
HOLD
Fixed dividend. It has a huge exposure to corporate bonds, preferred shares and a lot of the banks and insurance companies. There will be some dividend impairment for 6 months or a year. He would stick with it. If dividends get cut by the companies in it, then the ETF's dividend will probably be cut.
E.T.F.'s
DON'T BUY
It's like XTR--the yield you seem to get is not what you're enirely getting. He'd rather do straight bond ETF or covered call one.
E.T.F.'s
COMMENT
Been around for a long time. Very popular on its initial launch. Diversified financials. If you are very yield sensitive you should perhaps consider keeping it. If you are thinking of it as a real kinda cushion for your savings he would recommend a more diversified portfolio beside just financials. 53% bank allocation.
E.T.F.'s
COMMENT
When you get a return of capital you are getting some of your own money back. In the next downturn, this will probably lose in the range of 30%. It's a fine ETF and the distributions are bigger than the underlying holdings. He does not like it from a couple of perspectives but there is nothing else wrong with it.
E.T.F.'s
BUY
Which Canadian financials ETF to buy? Do you want income or equal weight? Defer capital gains? FIE-T pays a monthly income and include preferred shares, corporate bonds and banks stocks, so it's diversified. If you don't want this income and prefer exposure and a total return swap and defer the taxation, then he suggests HEWB-T. You don't get dividends, so it's a great way to defer capital gains. But do you want to pay an MER to hold the big 6 Canadian banks?
E.T.F.'s
DON'T BUY
What percentage of the distribution would be return of capital, not profits? You can look it up on the iShares website. He hasn't looked at this ETF in a while. It's an asset-allocation portfolio ETF. It uses a lot of financials and their bond and preferred issues to build a high-yielding portfolio. It also uses 15% leverage to juice its distribution to clients. It has a mixed of assets--preferreds and bonds. Pays nearly a 7% dividend. This underperforms financial sector ETFs, either flat or lower. This should stay flat on a capital basis. Look at XFN instead.
basis. IT pays a 6.% but that means little stock price movement.
E.T.F.'s
It pays over a 6% dividend yield, but this is less than what this ETF is earning. Doesn't like this. Are better ways to earn income.