ETFS

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jester
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ETFS

Post by jester »

hi im new on here and new to investing i like ETFS and found one i might be intrested in can you advise me if it is good please LBS is the etf i found :beer:
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Peculiar_Investor
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Re: ETFS

Post by Peculiar_Investor »

Welcome to FWF. If you are new to investing and like ETFs, then rather than selecting a single ETF, a much better approach is something like what's described in our wiki, Simple index portfolios - finiki, the Canadian financial wiki or Model Portfolios | Canadian Couch Potato.

As to your question about LBS, I had to use Google to find out about it. Is it Life & Banc Split Corp. Class A Shares [LBS] | TMXmoney? Generally ETFs that track a broad-based index are better than slice and dice ETFs.

Without more context about your investing goals/objectives and timeframes, it is very had to answer a newcomer to FWF about a single ETF choice. You might want to consider using our standard My Portfolio: Seeking Advice to give us more information so that members might provide answers more appropriate to your circumstances.
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Shakespeare
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Re: ETFS

Post by Shakespeare »

Toronto-Dominion Bank, Mackenzie Investments to start Canadian bond, equity ETFs | Financial Post
Toronto-Dominion has filed documents for six new ETFs, including an international Canadian-dollar hedged equity fund and one Canadian bond ETF, according to filings with Canadian regulators....

Mackenzie Investments, a unit of Winnipeg, Manitoba-based IGM Financial Inc., plans to start four fixed-income ETFs, including a floating-rate fund and an unconstrained bond fund, the filings show. Sphere Investment Management Inc., also plans to start ETFs later this year, according to filings.
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Re: ETFS

Post by Thanh »

Keep in mind that this news is from March 8, 2016.
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Shakespeare
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Re: ETFS

Post by Shakespeare »

A little late showing up on Google News.... :lol:
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Re: ETFS

Post by BRIAN5000 »

Wonder how XDIV at 10bp will compare to XDV at 50pb?
iShares Core MSCI Canadian Quality Dividend Index ETF

https://www.blackrock.com/ca/individual ... -en-ca.pdf

Canadian iShares® Product List As of June 2017

https://www.blackrock.com/ca/individual ... -en-ca.pdf

huh these look interesting

BlackRock Conservative Portfolio BLK625 0.60
BlackRock Balanced Portfolio BLK610 0.65
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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Re: ETFS

Post by AltaRed »

Have you done any research to compare XDV with XDIV (the underlying MSCI index)? It is a material difference in MER and something I need to consider for my ex (who has a substantial holding in XDV in addition to XIU). The 10% cap is interesting but the fact it can/will invest in other iShares ETFs is not.
The fund seeks to provide long-term capital growth by replicating, to the extent possible, the
performance of the MSCI Canada High Dividend Yield 10% Security Capped Index (the "Index"),
net of expenses. Under normal market conditions, the fund will primarily invest in securities of one
or more exchange-traded funds managed by BlackRock or an affiliate ("iShares ETFs") and/or
Canadian equity securities.
The Index targets companies from the MSCI Canada Index (excluding
REITs) with high dividend income and quality characteristics and includes companies that have
higher than average dividend yields that are expected to be both sustainable and persistent.
Securities are also screened based on certain “quality” factors such as return on equity (ROE),
earnings variability, debt to equity (D/E), and on recent 12-month price performance. The primary
investment strategy of the fund is to invest in securities of one or more iShares ETFs and/or in the
constituent issuers included in the Index, such that the resulting portfolio will have characteristics
that closely match the characteristics of the Index.
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Re: ETFS

Post by BRIAN5000 »

Have you done any research to compare XDV with XDIV (the underlying MSCI index)?
No sorry just found this today while working on that PACC for daughter. I will get there but may be a while one of the club members has XDV so he may be interested as well.

https://www.blackrock.com/ca/individual ... ief-en.pdf
iShares Core MSCI Quality Dividend Index ETFs
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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AltaRed
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Re: ETFS

Post by AltaRed »

Thanks for that link. The back testing of the index against TSX Composite is promising and bears watching. I will be interested in what the holdings, and sector weights, are before recommending it.
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Re: ETFS

Post by big easy »

AltaRed wrote: 22 Jun 2017 20:17 Thanks for that link. The back testing of the index against TSX Composite is promising and bears watching. I will be interested in what the holdings, and sector weights, are before recommending it.
XDIV:
5 holdings represent 50% of the assets under management and include 4 of the big 5 banks. Financials represent 57%, Energy 20%, Telecom 10%.
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Re: ETFS

Post by John47 »

AltaRed wrote: 22 Jun 2017 20:17 Thanks for that link. The back testing of the index against TSX Composite is promising and bears watching. I will be interested in what the holdings, and sector weights, are before recommending it.
Hi there --- I read in another thread that you had eventually bought it for your ex-spouse;
are you satisfied with the way it's managed and its holdings until now?

Still worth buying for easy, instant exposure to Canadian dividend-payers? I'm thinking of buying it in my taxable margin account.
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Re: ETFS

Post by AltaRed »

Firstly, she bought it herself, i.e. I didn't buy it for her in 4Q17. Had not looked at it since it was purchased until tonight.

It was actually a straight swap from XDV which I was not overly fond of (high MER), and I notice it has performed better than XDV over that period of time, as one might expect. It is the choice we made for her purposes, i.e. an income stream.

Is it the best choice for a Canadian dividend stream? Maybe not, but given its objectives....
1. Low cost portfolio of Canadian stocks with above- average dividend yields and steady or increasing dividends.
2. Selects securities with strong overall financials, including solid balance sheets and less volatile earnings.
3. Designed to be a long-term core holding.
and low MER, I suspect she will just clip the dividend for years to come.That, ZRE and XIU (with large unrealized cap gains) covers the Cdn equity market for her in a 'set and forget' portfolio.
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Re: ETFS

Post by OptsyEagle »

I think all Blackrock was trying to do is offer a lower MER for dividend investors. They probably did not want to lose the extra revenue they were generating on XDV, by simply lowering that MER. XDV still has over $1.3 Billion in it. So they simply offered another to new investors looking for a more competitive MER and existing investors like Altared, who keep an eye on these things. They will keep dinging all the rest of their investors who don't seem to care.

Can't really blame them.
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Re: ETFS

Post by AltaRed »

Probably. They made objectives just different enough between XDIV and XDV to have a slightly different set of holdings, albeit still heavily financial. However, that is fine for the Canadian market since it seems financials have a way of doing well here long term relative to a number of sectors.
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Re: ETFS

Post by OptsyEagle »

AltaRed wrote: 10 Mar 2019 10:26 Probably. They made objectives just different enough between XDIV and XDV to have a slightly different set of holdings, albeit still heavily financial. However, that is fine for the Canadian market since it seems financials have a way of doing well here long term relative to a number of sectors.
Absolutely. They have a regulation now "Know your Product" that says that if a customer can get the same investment at a cheaper price, the Advisor/Investment Mgr MUST direct them to it. So it looks like Blackrock did exactly as you said to get around this rule and a few other issues and keep all those extra management fees.

The mutual fund companies got whacked with fines for having so many classes of the same fund. When their customers made the mistake of investing in the higher MER fund, they kept silent as well. That ended up being very costly for the mutual fund companies and their dealers. Of course the mutual fund companies are now making changes to ensure their best interests are maintained...I mean the customer's bests interests are maintained. I will let you determine where the error is in that last statement. lol
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Re: ETFS

Post by Peculiar_Investor »

OptsyEagle wrote: 10 Mar 2019 11:51 They have a regulation now "Know your Product" that says that if a customer can get the same investment at a cheaper price, the Advisor/Investment Mgr MUST direct them to it.
Do you have a link to that regulation and the specific section that covers this issue?
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Re: ETFS

Post by John47 »

AltaRed wrote: 10 Mar 2019 00:26 Firstly, she bought it herself, i.e. I didn't buy it for her in 4Q17. Had not looked at it since it was purchased until tonight.

It was actually a straight swap from XDV which I was not overly fond of (high MER), and I notice it has performed better than XDV over that period of time, as one might expect. It is the choice we made for her purposes, i.e. an income stream.

Is it the best choice for a Canadian dividend stream? Maybe not, but given its objectives....
1. Low cost portfolio of Canadian stocks with above- average dividend yields and steady or increasing dividends.
2. Selects securities with strong overall financials, including solid balance sheets and less volatile earnings.
3. Designed to be a long-term core holding.
and low MER, I suspect she will just clip the dividend for years to come.That, ZRE and XIU (with large unrealized cap gains) covers the Cdn equity market for her in a 'set and forget' portfolio.
Great, thanks for sharing!

Would you hold it yourself?

I'm guessing an investor like yourself would pick the individual stocks.

As for myself, I'm liking it as a purchase in my margin account.
4.8% distribution yield in the form of eligible dividends, instant diversification, 20 holdings, so less potential for a dramatic fall than holding a few stocks.

One thing I wonder about though, is why did the distribution drop in 2018?

See:
https://web.tmxmoney.com/dividends.php?qm_symbol=XDIV

In October 2018, the monthly distribution was cut from 0.084 to 0.074, and it still hasn't recovered that level. Any idea why? I had a look at the underlying holdings, and I don't recall a single one of them cutting its dividend during 2018.
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Re: ETFS

Post by OptsyEagle »

Peculiar_Investor wrote: 10 Mar 2019 12:01
OptsyEagle wrote: 10 Mar 2019 11:51 They have a regulation now "Know your Product" that says that if a customer can get the same investment at a cheaper price, the Advisor/Investment Mgr MUST direct them to it.
Do you have a link to that regulation and the specific section that covers this issue?
Here is the direct regulation.

https://www.osc.gov.on.ca/en/Securities ... roduct.htm

The regulators took that regulation and said that it meant that if a mutual fund company/dealer knows (know your product) that they have an identical fund with a lower MER they are obligated to move the investor to that cheaper fund. To ensure they truly understood what the OSC wanted they thought a few hefty fines might help. Actually it was a reimbursement not a fine, but still a wakeup call for the industry.

Here is Royal Banks hit. There were many others, although it did not get the press that one would think, like for instance the "market timing" scandal did.

https://www.cbc.ca/news/business/royal- ... -1.4180015
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Re: ETFS

Post by Peculiar_Investor »

OptsyEagle wrote: 10 Mar 2019 13:36
Peculiar_Investor wrote: 10 Mar 2019 12:01
OptsyEagle wrote: 10 Mar 2019 11:51 They have a regulation now "Know your Product" that says that if a customer can get the same investment at a cheaper price, the Advisor/Investment Mgr MUST direct them to it.
Do you have a link to that regulation and the specific section that covers this issue?
Here is the direct regulation.

https://www.osc.gov.on.ca/en/Securities ... roduct.htm

The regulators took that regulation and said that it meant that if a mutual fund company/dealer knows (know your product) that they have an identical fund with a lower MER they are obligated to move the investor to that cheaper fund. To ensure they truly understood what the OSC wanted they thought a few hefty fines might help. Actually it was a reimbursement not a fine, but still a wakeup call for the industry.

Here is Royal Banks hit. There were many others, although it did not get the press that one would think, like for instance the "market timing" scandal did.

https://www.cbc.ca/news/business/royal- ... -1.4180015
Thank you for the follow-up to my question.
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Re: ETFS

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I should add that I don't think this regulation went into place because of the mutual fund companies taking more fees then they should. It was probably added in as a secondary benefit. I think the real reason they implemented this rule is that every single time a client lost money on an "unsuitable" investment, when the advisor was brought to explain himself/herself, the answer was way too often "I did not know the investment worked like that" or "I did not know the investment invested in that".

The regulator looked at these individuals and said, "you are telling me that you sold numerous amounts of this investment to numerous clients, earning commissions and ongoing fees for years and you never took the time to even read the prospectus, let alone understand the investment really well"

Kind of pathetic, but advisors are in the business of selling product NOT understanding investments. They only want to understand the investment to the minimum amount needed to sell it and make money.

I think the regulator's real effort was to try to change some or all of that. Good luck to them. I have met many, many advisors in my lifetime and I say again...good luck with that. I do like that they are trying, however.
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Re: ETFS

Post by Thegipper »

I recall my experience back in the 1990s. My investments were through a FA and he had me in a basket of high MER Dynamic funds. When discount brokers came along I transferred and eventually unloaded these dogs as soon as the penalty period expired. As I recall the MERs were probably at the 2.5% rate.
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Re: ETFS

Post by fireseeker »

Thegipper wrote: 11 Mar 2019 08:53 I recall my experience back in the 1990s. My investments were through a FA and he had me in a basket of high MER Dynamic funds. When discount brokers came along I transferred and eventually unloaded these dogs as soon as the penalty period expired. As I recall the MERs were probably at the 2.5% rate.
Similar story here.
I find the cost extraordinary when I think back to it -- 2.5% MERs and $200+ per stock trade.
Over the last 10+ years we are averaging about a 6.5% return on a 60/40 portfolio. So, in the 90s we were taking the risk and putting up the capital and the adviser was getting roughly 40% of the profits.
The fee changes in 20 years are astounding. And very, very welcome.
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Re: ETFS

Post by OptsyEagle »

Financial advisors really only do one thing for the investor. They provide the false belief that everything is under control and that there is some type of master plan at work. For the most part, there really isn't, but during the turbulent times of high uncertainty and volatility, that belief, for anyone that does not know what is really going on, can at times be worth it's weight in gold. It can provide you with the ability to stay the course during those turbulent times, where any change in course will probably be the wrong one.

All the other times, it is a complete waste of a material amount of money. For those of us that understand that the Financial Advisor has no more control of investment returns then anyone else, and even the most ethical ones will be harnessed with way too much personal bias, doing it yourself becomes a much more rewarding endeavour.

That said, it would be nice to have someone else to blame, once in a while, but my learning curve tends to improve dramatically, when I point the finger directly at myself. There is just not enough time in this world, to get everything done, if you have to keep learning the same lessons over and over again.
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Re: ETFS

Post by randomwalker »

Invest Like Wall Street Legends
Market beating portfolios and stock analysis based on strategies of legendary investors like Warren Buffett, Benjamin Graham and Peter Lynch.
https://ca.validea.com/

And an actively managed ETF to allow you to do it.
https://www.valideafunds.com/market-legends-etf
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Re: ETFS

Post by kumquat »

randomwalker wrote: 23 Jul 2019 18:53
And an actively managed ETF to allow you to do it.
https://www.valideafunds.com/market-legends-etf
But the blurb says it's paasively managed
The Validea Market Legends ETF is an passively managed ETF
Surely they wouldn't lie to us.
I don't intend to offend anyone, that part is just a bonus.

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