Opinions

Paul Harris, CFA iShares S&P/TSX 60 Index ETF XIU-T BUY ON WEAKNESS Oct 18, 2023

Banks have down poorly this which has limited the TSX, though oil has gone up. You need the financials to do well for XIU to do well. But in the long run, this will outperform in coming years.

Paul Harris, CFA

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BUY

An ETF to buy? There are so many ETFs, so it depends what you're looking for. XIU offers growth and income for retirees. This is a core holding for any investors. There's also a BMO utilities ETF offering a yield and upside. Also, a Canadian bank ETF from any vendor will give you income and growth, like ZWB-T. An ETF reduces volatility vs. owning individual stocks.

COMMENT

XIU has a slightly higher MER. HXT does not distribute the income but is capitalized into the portfolio holdings. It makes it a capital gain than dividend income. The redemption cost is also a factor. Would prefer HXT all things considered.

BUY

XIU vs. XIC Correlations and holdings are quite similar. XIC is more diversified, with about 240 holdings. XIC has a 6 bps MER, while XIU is 18 bps. Performance has been very similar. XIU has a bigger weighting in banks, about 28%. XIC has about 23% in banks. Not much diversification if you own both. Also look at XEI, a high dividend ETF, geared towards a higher yield.

BUY

Allan Tong’s Discover Picks XIU stock charges only a 0.18% MER but pays a 3.02% dividend yield. Averaging 3,000,000 shares a day, XIU is fairly liquid, over six times more than, say, XIC-T. The biggest holding here is Shopify which has been quietly making a comeback, followed by Royal and TD, the country’s biggest banks. Enbridge, CN, BAM and the other banks are also major holdings and well-regarded by investors. XIU is a cautious trade, one that an investor can enter and exit at a profit. Read 3 Defensive Stocks to Catch the Rebound for our full analysis.

HOLD

Well know ETF with ~3.4% dividend yield.
Canadian banks, utilities and infrastructure included.
Good ETF, but prefers XEI.

Unspecified

It holds a basket of large cap Canadian names and he likes it for the energy and banks holdings. The TSX 60 is not as far ahead as its counterparts in the U.S.

BUY

Excellent growth option. Lots of tech, consumer and healthcare stocks. Would recommend buying for the long term.

BUY

Oldest ETF in the world (launched in the 1990s). Cheaper ETF's but overall, a great product. Over the long term, good product.

BUY

Great way to get exposure to Canadian equities. Has performed well the past 5 years. Would recommend buying as a way to get exposure to Canadian economy.

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Paul Harris, CFA iShares S&P/TSX 60 Index ETF XIU-T BUY ON WEAKNESS Oct 18, 2023

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