Canadian energy policy “bewilderment.”Political will was missing a couple of years ago, and now in desperation the only way to get a pipeline built is to nationalize it. Social license issues are not something you bring to a trade meeting lik NAFTA. Lots of policy problems in Canada.
A way to play European market and has covered calls. Neat thing is it has a 5-6% yield. Conservative way to play Europe, though limited upside because of the covered call.
Bank stocks in an ETF or directly for a long-term investment? There’s the ZEB ETF, but this one is expensive, and only has the 6 banks. He would buy just a couple of the banks outright, and relax.
Harvest is pretty new to ETF space. Takes the best known companies and adds covered call. Problem is that covered calls will most always be outperformed by the companies themselves. Covered calls are great for generating tax-efficient income, but not growth.
Good time to buy? Look at what else you have in your portfolio. Low cost. Very basic, good replication of TSX 60. 30% financials, 20% energy, 20% base metals. Always has XIU in his portfolios. Core holding.
How else to access Canadian economy beyond XIU? There are 700 ETFs and 2700 providers. BMO, iShares, and Vanguard, dominate 80% of the ETF market. Very competitive prices, pick one. He likes XIU and XIC because they’re liquid, and he can get options on the Montreal exchange.
Keep holding? Likes it for the income. Not a bank ETF, it’s across the board high yielders. It has underperformed, because it’s a covered call. If an investor wants US banks, CAD hedged, look at ZUB or US financials.
How important is the brand name of the ETF? Doesn’t matter except what it means for the cost. Horizons are a little pricier because they have do some creative things. But no one can compete with the top 3 providers (iShares, BMO, Vanguard) in terms of cost.
(A Top Pick August 8/17, Up 8%)This holds what’s left over from the XIU 60. Wanted to get into some smaller stuff to get better diversification, and focus on this rather than the broader-based indices.
Good fixed income play in a diversified portfolio? EM bonds give higher return at higher risk. For a younger investor with 70% equities and 30% fixed income, wouldn’t have more than 5-6% in EM bonds. Funny things can happen in terms of valuation and nationalization.
