iSHARES SP TSX COMP HIGH DIV INDEX ETF (XEI-T)

Generally likes the dividend payers, depending on the investor. Good if you're looking for income and steady growth. Be aware that a lot of the weighting is bunched around the Canadian banks, with energy companies following. Steady performance, value play. Dividend is fine and growth will be there.

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.

The caller's question was on which of these ETF's to buy for a start-up portfolio for his 20-year-old daughter. He prefers more sectors to be covered in this situation so he suggested XEI. There are more multi-asset solutions as well. He also suggested lowering the risk tolerance for a beginner investor.

Basket of high-dividend Canadian names. Both about 24-25% cumulative returns over the last 3 years. 

XEI more diversified with 30% financials plus 30% in energy. Slightly better MER of 22 bps. Yield is ~5.5%.

ZDV is 38% financials and 20% energy, so might make sense if you really love financials. MER is 39 bps. Yield is 3.8%.

Not just the highest payers, but this holds companies with a strong history of dividend payments. VDY is also good, but the dividend is lower. MER is a low 0.22%.

He likes XEI and VDY. Both pay ~5% yield. VDY is about 45% Canadian banks. XEI is a bit more diversified, with 23% Canadian banks as its top weighting.

For income, he prefers these to a covered call strategy. Though the covered call strategies look very attractive, they tend to underperform the underlying securities, especially in a rising equity market. Great if you need the income, but you'll get a better total return with the other.

Canadian based. Basket of high-dividend-paying names. Lots of banks, SU, ENB, and so on. An ETF like this might actually have more leverage in the falling interest-rate environment that we're in now.

Consists of banks, utilities, some energy names creates a safe dividend option. If interest rates fall, will be good for stock. XDI probably a better name (has quality names in fund). 

Likes some of these solid, large-cap dividend names. Interest rate environment's on pause, likely to fall, beneficial for dividend-type stocks. Excellent name.

Great product for extra yield. Depends on investor strategy. Could be a great holding for yield seeking investors. 

Tough place to be with rising interest rates. Yield is 5.2%. MER is 22 bps. Will rebound once interest rates start to calm down.

Likes it for dividends. Lots of large-cap banks and pipelines. Defensive, fairly conservative. Names like TD, CNQ, RY, SU, ENB. Very good dividend yield of 5.1%. Banks are cheap right now, so potential for a pretty good move up. Once interest rates fall, the telcos in this particular ETF will perform well.

~4.9% dividend yield very safe (mostly defensive names).
Comprised of mainly infrastructure and utility names.
Conservative name to own for the long term.

Adds cyclicals like financials and energy names to give you a bit more growth. Yield is 4.8%.

XEI pays a 4.89% dividend yield, trades at an 11x PE and a 0.91 beta. Volumes average 73,300 so daily trading can be a little choppy, but a dealbreaker. XEI charges only a 0.22% MER. If you’re skittish the banks and are an ESG investor, avoid XEI. All others, give this a look. Read Canadian dividend payers for our full analysis.