iShares Core S&P/TSX Capped Composite Index ETF (XIC.TO)

There are people concerned about Trump, NAFTA, real estate, etc. and have withdrawn form the market and are sitting on cash. He has come up with suggestions that are relatively safe and represent a broad diversification in relatively safe areas. With this, you are going into a broad market. If the TSX does break out, this stock will match that performance. It gives you good diversification.

XIC-T vs. ZCN-T. He does not know the difference between them. The Canadian market is the least diversified in the world. He does not want to own anything that tracks the TSX unless we are in boom time in the banks or commodities. He does not invest in ETFs.

He likes this because it has options on it, and is a little less heavily weighted towards financials and energy. A very good core ETF to have and hold.

The premiums for options seem very, very thin. Because of the diversity that protects you? Yes. This one is just the capped TSX 60. It was designed when Nortel was a big part of the index, so they capped the exposure to one stock. We don’t really have that issue today. You are looking at a diversified ETF that isn’t particularly volatile.

If you feel the total index has a little more oomph to it, this is the place you want to put a little of your money right now. It is for those people who feel they are being left behind but can’t make up their minds as to where to put their money. It gives a lot of diversification.

(A Top Pick May 26/16. Up 12.24%.) He thinks of Canada as a core holding for many Canadian investors and, of course, you have to be careful of how much you hold. When it comes to building out that core position, he likes to start with low cost, passive ETF’s, such as this one.

This is a great product and it is cheap. He has this in practically all of his accounts.

The Canadian market got clobbered last year. This one has not fully recovered yet. He would not abandon ship. It has not made money because the market has not made any money. This is solid and he would not be selling it.

Basically the TSX composite index, 240 some companies listed in Canada, the entire Canadian market. He has been legging slightly back into the Canadian market in his model portfolios, and this is his core exposure.

Exposure to a broad market. It is well disposed toward someone who is a trader. For an investor, he would recommend XSP-T. You take away the currency risk.

Should you hold other ETFs directly that are held within this ETF? XIC-T is the broad TSX composite. You could sell and then overweight ZEB-T to overweight the banks, for example. Sector specific ETFs can be used instead to overweight certain sectors.

(Top Pick May 1/14, Up 6.23%) Has a lot of mid and small cap names. It should do better than XIU-T but he would expect the volatility to be higher.

(A Top Pick May 16/14. Up 7.47%.) The only reason he picked this over other similar ones is that they are optionable, and from time to time he likes to do a little hedging. Also, the fees have been chopped down to about 5 basis points.

There has been tremendous competition in ETFs in terms of MERs. The costs are not going to go lower than this because they make almost no money with this.

Likes this because the fees are so low on it that it has to be a core Toronto holding. He also likes it because it has options available on it.