iShares Cdn Dividend ETF (XDV.TO)

Another ETF to look at for monthly dividend payments. For global diversification, though, he's probably stick with VDY or CYH.

About 38-39% banks, energy is less than 30%. OK, but he prefers the diversification of XEI. Yield is 4.2%.

He always advocates diversifying a portfolio. You don't want to have too much in one name. Ever. He doesn't know the percentage of the investor's portfolio. If BCE is only 1% of the portfolio and with BCE being relatively cheap, he'd stick with it. But if BCE is a huge part of the portfolio, then diversifying that risk away would make sense.

Here's the challenge:  what's in XDV? Banks, lifecos, energy names. Has done well in recent years, whereas BCE has underperformed dramatically. 

For more diversification, he'd look at ZWU -- gives you some telcos and utilities plus a covered call. Nice, tax-efficient yield north of 7%. And you don't have the current extremes of the banks and lifecos of XDV.

XEI has more energy exposure, and he'd skew to less energy at the moment. But it's a difficult call, as that can change. Jury's still out on energy.

XEI will be a broader basket, while XDV would be more concentrated in the top 60 or so names. The question is do you want a bit more diversification away from the banks, energy names, and lifecos that make up the larger companies in Canada? He's always an advocate for broad diversification in portfolios. Each individual investor has to decide what they want.

When you go for high-dividend payers in Canada you get the banks, insurance companies, pipelines, and some of the energy names. Yield will be a bit over 4%. A nice way to play.

Vanguard, iShares, and BMO all have offerings, but they all do it slightly differently. BMO has a covered call version, ZWC. There's ZDV, XDV, VDY. Take a look at them all and see what you like. All have different weights to the components. They're all equally good.

How to increase dividends. These are all the same thing. You get exposure to Canadian large caps. There is no diversification by being in all three. ZWU-T should replace one of them to get utilities including pipelines and telcos and less reliance on the banks. Still Canada so you need international. ZWE-T is the best international dividend payers yielding 7% with a covered call overlay. ZWS-T is the best in the US. These are the two to add to the three. These should be in a registered portfolios if you are retired because there is no divined tax credit.

XDV-T vs. ZWC-T. Most stocks in those two indexes are similar. ZWC-T has a covered call overlay. XDV-T is more sector concentrated. He advocates that if you are in the market late in the investment cycle you want to be in a covered call strategy. It gives you a smoother ride.

$22,000 for an income dividend holding? He would consider just going with a dividend ETF. You get diversification amongst the blue chips. It gives you a dividend of about 4.5%.

Any ETF that focuses exclusively on dividends in that Canadian environment of large caps shouldn’t be classified as high risk. A pretty good place to hide if you have the proper time frame of 2-3 years.

He sees no problem holding this. If you are not overweight in the Canadian banks already, this is fine. This is a monthly dividend.