Stockchase Opinions

Mike S. Newton, CIM FCSI BMO Monthly Income ETF ZMI-T COMMENT Aug 13, 2014

A safe monthly income for a retiree without the worry about market swings? On any monthly income vehicle, you have to be very careful. If this had existed in 2008, it would’ve dropped about 20%-25%. Also, make sure it is run by a real well-run ETF provider and make sure you look at what is underneath it all.

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COMMENT
ZMI vs. ZZZD ZMI is a balanced income-focused ETF. ZZZD is his own ETF that he manages--a sleep-at-night global dividend ETF. ZMI is a lot more fixed income (to preserve capital) and is far more passively managed vs. ZZZD which is active, hence riskier. Very different focuses, but both generate a lot of income.
BUY
An active ETF that's a safe dividend payer? Be defensive late in the cycle now. There are many, many ways to play this, but he'll suggest ZZZD which he manages, or particularly ZMI.
BUY
Likes it. It's a one-ticket solution to get a full portfolio that pays a little yield; an active ETF constructed from other BMO ETFs, an ETF of ETFs. This has been around for a while. It's a good, conservative pick. Tip: Compare ZMI to VCIP and see which one you prefer.
BUY
For an RRSP? Yes, it's a good product. For an RRSP, yes, it's a good idea, but you can also hold it in a taxable account just as well.
BUY
[As sole holding]. It is a yield focused balanced fund made up of a bunch of ETFs that are more yield-centric. The only criticism is that there is probably too much exposure to Canada. When it is in a registered account then you don’t get the benefit of the dividend tax credit. Making it the only holding in an account there is 'manager risk' and perhaps there is too much concentration in Canada if it is in a registered account. Otherwise it is not a bad idea.
DON'T BUY

The bond markets are impaired and will be for a while. Low interest rates are here to stay. Income focused ETFs with exposure to bonds will not return 4-5%. Are you getting return of capital or yield? Must look into the structure where the returns are coming from. Both are similar. Both ZMI and XTR give you exposure to diversified income. All fixed income has negative return after inflation.

BUY
Caller is over 70 It holds bonds and stocks 50/50. ZMI is a good ETF. Conservative and diversified, suitable for older investors.
BUY

Good for defensive investors. Safe dividends. Very low management fee. Good for RRSP. Includes equity growth in this product as well. 

BUY

Quality product that is good for many investors. Has a nicely balanced asset base. Good for income seekers as well. Would recommend buying. 

HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

The fund owns a mix of global bonds and stocks, with 57% equity exposure and 40% US exposure. It also owns 10% cash. While certainly not risk free, it is a well-balanced ETF paying a 4.75% dividend and we would consider it fairly conservative. 
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