HBP S&P/TSX 60 Index ETF (HXT.TO)

(Past Top Pick, Sept.1, 2017, Up 11%) Covers the TSX, pays no dividends and charges a very low MER.

What's the difference if I use derivatives with HTX than not? Best to do this in taxable accounts, because you don't receive a dividend per se. With this, a counter-party guarantees that your ETF will generate that rate of return on the swap. The key is who is the counter-party which in this case is National Bank, which he's comfortable with. You don't get cash flow, but you get the exact rate of return on the Canadian equity market appreciation, plus dividend. It's a nice one-stop.

They are a little different than most other ETFs. This is a swap-based ETF. Basically, a contract between Horizon and National Bank. These are total return ETFs so there is no distribution so very efficient for people making high income.

HXF-T or HXT-T? He likes both. This one is Toronto, while the other is US. They are basically swap vehicles, which is different from most ETF's where they actually hold the security. There is no distribution, so are for people who want to retain the distributions within the ETF. A great vehicle for someone who is still working and doesn't want the income.

HXS-T and HXT-T in a non-registered account. He likes this strategy based on a total return swap. You only pay capital gains tax. There is no distribution. If you believe the markets will go higher for a number of years these are great instruments. A buy and hold for many years.

This is extremely low cost. What is different about Horizons products is that they are a total return index. This is for someone who doesn’t want the income. There is no distribution, therefore there is no tax. It is all done with a SWAP. All you have to do is go onto Horizons website where there are a couple of really good concise explanations of what they are doing. 100% of it stays with their custodian and they do the SWAP thing, and their counter-parties are National Bank and CIBC.

This is a derivative play, which has scared some people. It holds the dividend and builds it into the capital costs. If you are not looking for income, this is not bad. Another one you could consider is the iShares TSX 60 (XIU-T).

It tracks the same index as the XIU-T. There is a major difference in terms of structure. HXT-T is structured around a total return swap. This allows them to run it very cheaply (3 basis points). It does not pay a dividend and accrues the yield to the NAV. It is tax efficient compared to XIU-T.

It uses forward contacts to replicate the return of the TSX 60. It tracks the TSX 60. He is not sure how the holdings’ dividends are treated for tax purposes.

(A Top Pick April 14/15. Down 2.35%.) Most markets peak on May 5, but the TSE Composite actually peaks on May 29. If you have invested in this, now would be a good time to consider making your move into more conservative investments, preferably cash, bonds, short-term notes, etc.

TSX 60 finally broke through a 7 year high, which is technically very, very good. This is in an upward trend, above its 20 day moving average and is outperforming the S&P 500. The problem is, once you get into May to October, volatility increases virtually every year, so you want to protect yourself by owning this until May and then look for some technical signals to take some profits.

(Top Pick Dec 31’14, Down 2.72%) It was a market call, but it didn’t work out. He had hoped to hold until the end of May.

The best time to own Canadian stocks relative to US stocks is right around the middle of December through until the middle of March each year. This year in particular looks interesting, because we have seen the TSE Composite slightly outperform the S&P during the last couple of weeks. Of greater importance is the earnings reports coming out during the 4^th quarter, where results from the major US companies are not going to be that great.

(A Top Pick Nov 6/12. Up 11.86%.) Seasonal strength is from October to May of each year. Historically, the best time to own the Canadian market instead of the US market is from Dec 7 until March 7. Overnight, all of the commodities such as gold, oil, silver, copper are being bought by China. Canada is a commodity market. (See Top Picks.)

One of the most actively traded ETFs in Canada. Basically, it tracks the market. You want to be in the Canadian market between December 7 and March 7 because that is the time when Canadian markets outperform the US markets. We are just about to enter that period of seasonal strength.