iShares Equal Weight Bank & Lifeco ETF (CEW-T)

BANK includes an option overlay to enhance the yield. CEW is equal weight. Compare the two to determine what you're looking for. BANK is probably the safer choice at this point. But if markets go down rapidly, there's no protection anywhere.

If you want more income, and you're cautious on the market, then BANK will probably do better than CEW. If you're defensive to neutral on the outlook, then a covered call overlay will add value to your portfolio. Though there will be less total return in the long run.

If you're bullish on the underlying equities, then just buy them at either equal weight or market-cap weight. In that case, the CEW would do better.

Good option to play banks and life insurance companies.
Likes equal weighting attribute of the business.
Life Co.'s relative to banks will under perform.
 

CEW stock trades on the TSX, though only at daily volumes of 5,700. It also charges a relatively high 0.61% for a passive fund, though pays a near-4% dividend yield. In the month of January, CEW stock has climbed nearly 8%. Not bad. Its beta sits at 1.01. Read 4 Insurance Stocks to Stay Safe in a Risky Market for our full analysis.

It is a leftover from the Claymore days and has become an orphan. He would prefer the HEF-T financial ETF with covered calls on the financials. It has enhanced income.

Doesn’t know this one very well. The fundamentals have been very good with rates rising and the economy being strong for banks and insurance companies. If you are a person that invests in sectors, this is probably a good sector to be in right now.

Canadian Banks? Has been tempering his love of the Canadian banks through this ETF which holds lifecos as well. Canadian banks have been down this year, but they have great yields on them and are great at cost cutting.

Rising interest rates are far better for insurance companies than banks. Banks are impacted by the steepness of the yield curve. He likes this ETF, but the reason for buying it does not exist right now.

Thinks Canada may get on the path of lowering short-term interest rates and you’ll see the long-term rates come down based on the sluggish expectations of the Canadian economy. This ETF is basically a basket of Canadian banks and insurance companies. You are paying about 60 basis points for this one. It gives you a pretty broad base. Long-term he thinks you will do well.

This gives you banks and lifecos. He tends to prefer the bank only, simply because we saw what happened to the lifecos during the recession and they hadn't hedged their positions. He still has a bit of a bias about that. You could take a look at these and be pretty confident. He would prefer iShares TSX 60 ETF (XIU-T) as they have the banks and lifecos already included.

There are lots of positive things in the bank space. This one traded sideways as we went through a couple of issues with respect to regulatory cash levels in Basil 3 on the banks side. Also, you have issues with the yield curve with the lifecos. During that period, this moves sideways and he feels it is now going to move upwards because of a rising interest rate environment. A yield curve change is good for lifecos. There is not a major catalyst for this to move higher any time soon, but there is nothing to make him worry about it going lower.

Likes this. He is very positive on financials for the next year. Canadian banks and the lifecos and both will benefit from higher interest rates. Very good ETF.

(Market Call Minute.) A 5% position in this would not be unreasonable.