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Richard CroftiShares Cdn Financial Monthly Income ETFFIE.TOCOMMENTDec 19, 2013

This would be a great Hold, if you are looking for an income generating vehicle. If you are at a point in life where you want to have some income, this is a great way of doing it. 6.78% yield.

Richard Croft

Unknown

Unlock Rating

$7.07

Stock price when the opinion was issued

$11.18

As of Jun 19, 2026. Market Open.

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PARTIAL BUY

Good option for real estate investors. Safer bet than over valued tech stocks. Also provides decent yield. Could also be a good option with falling interest rates.

DON'T BUY

Strong dividend payouts has led to shares being traded for long time. Not a strong return on capital. Would not recommend buying.

COMMENT

A financial, dividend paying strategy. Has banks, insurance companies and dividend payers. A concentrated investment in financials so keep this in mind for allocation. Around 6% yield. However, underlying is not earning 6%, so there is a return of capital. A tax effective way to get exposure to financials.

COMMENT

There are two elements to covered call strategies. There is the underlying stocks, and then the option premium. Volatility will continue to be high for the next couple years. Premiums will remain elevated. FIE pays back a part of your money back. There are a couple different elements to consider.

DON'T BUY

It is not really diversified. This is extremely concentrated. You need to question your confidence in dividends. There is a reason this has an 8% yield and it is not because it is a safe haven.

HOLD

Fixed dividend. It has a huge exposure to corporate bonds, preferred shares and a lot of the banks and insurance companies. There will be some dividend impairment for 6 months or a year. He would stick with it. If dividends get cut by the companies in it, then the ETF's dividend will probably be cut.

DON'T BUY

It's like XTR--the yield you seem to get is not what you're enirely getting. He'd rather do straight bond ETF or covered call one.

COMMENT

Been around for a long time. Very popular on its initial launch. Diversified financials. If you are very yield sensitive you should perhaps consider keeping it. If you are thinking of it as a real kinda cushion for your savings he would recommend a more diversified portfolio beside just financials. 53% bank allocation.

COMMENT

When you get a return of capital you are getting some of your own money back. In the next downturn, this will probably lose in the range of 30%. It's a fine ETF and the distributions are bigger than the underlying holdings. He does not like it from a couple of perspectives but there is nothing else wrong with it.

BUY

Which Canadian financials ETF to buy? Do you want income or equal weight? Defer capital gains? FIE-T pays a monthly income and include preferred shares, corporate bonds and banks stocks, so it's diversified. If you don't want this income and prefer exposure and a total return swap and defer the taxation, then he suggests HEWB-T. You don't get dividends, so it's a great way to defer capital gains. But do you want to pay an MER to hold the big 6 Canadian banks?

DON'T BUY

Thumbs down. It has a fixed distribution of 7% and if you look at what it holds you are looking at 3.5 to 4% so you are getting a return of your own money back.

DON'T BUY

What percentage of the distribution would be return of capital, not profits? You can look it up on the iShares website. He hasn't looked at this ETF in a while. It's an asset-allocation portfolio ETF. It uses a lot of financials and their bond and preferred issues to build a high-yielding portfolio. It also uses 15% leverage to juice its distribution to clients. It has a mixed of assets--preferreds and bonds. Pays nearly a 7% dividend. This underperforms financial sector ETFs, either flat or lower. This should stay flat on a capital basis. Look at XFN instead. basis. IT pays a 6.% but that means little stock price movement.

DON'T BUY

Doesn't like it at all. The problem is never trust yield. If an ETF is paying a yield that's higher than the yields of the stocks within that ETF, then where is the money coming from? The way this is presented to investors is unclear and
incorrect.

DON'T BUY

People buy this for the 6% yield, but the banks and high-yield companies inside this ETFs yield only half that. Where's does the rest come from? This is about a return of your own capital to goose the yield, not a return on capital. You end up with a lower adjusted cost base, so when you sell it yet get whacked with a heavier tax.

DON'T BUY

Not one of his favorites. One of those ETFs where there is the possibility of Return of Capital as opposed to Return on Capital.

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Richard CroftiShares Cdn Financial Monthly Income ETFFIE.TOCOMMENTDec 19, 2013

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