iSHARES SP TSX COMP HIGH DIV INDEX ETF (XEI.TO)

XEI has a fair exposure to the overall business cycle with broad based holdings. You want to focus on areas of the market that have less impact from issues in the financial markets. He would opt more for a utility ETF (XUT) that is more of a regulated sector with a agreed return on capital and more likely to be sustained.

VDY vs XEI ETF? VDY and XEI is very similar and their prices track closely. VDY tends to hold higher financial sector exposure, where yields are generally higher. Whereas XEI holds the highest yield payers on the composite Index. He also likes XDIV which has the lowest MER (0.11%). It holds "quality" holdings, using an algorithm to pick higher ROE, lower levered companies with earnings stability.

MER has fallen from 40 to 20 basis points, and pays a yield over 4%. A good, pure dividend pay with a low MER.

XCV-T vs. XEI-T. XEI-T is a high dividend strategy. XCV-T is a value approach. XEI-T has 24% exposures to each of pipelines and banks. XCV-T has 31% in banks and oil/gas at 16% and these are the major differences. Neither one is particularly good value, but he would go for XEI-T at the moment.

Because of its oil exposure, this had dropped quite a bit, but is now working its way back. There is now some stability in oil prices, so he is holding this. It gives a good yield of 4.9%.

Put your new money into something other than this. If you are on a fixed income, you cannot take this kind of fluctuation and the price. Any time you are looking at these dividends or a high yielding instrument, all of the ETF providers have very good websites, and you can go to them and click on “Holdings”, and look at the top 10 holdings. If you find a name that you are not comfortable with, or if there is a lot of energy, don’t buy it.

(A Top Pick Oct 31/14. Down 10.39%.) He likes this because they chopped the price from 45 basis points down to 20 basis points. This was beaten up last year because it is about 30% oil, 30% financials and 10% telcos. Paying a good yield of about 5.2%.

(A Top Pick Sept 2/14. Down 19.96%.) He didn’t have this initially because of the high fees, but it was one of the ETF’s that iShares chopped substantially down to 20 basis points, so he bought it because he already had a lot of exposure to Canadian banks. There is nothing wrong with this except that it got hit because it has oil stocks and dividends.

He likes this. iShares dropped the price. It was around 45-50 basis points and they dropped it to 20. A very good dividend ETF and he doesn’t see anything wrong with it, but there is some oil exposure that could continue to decline, so be a little bit cautious. (See Past Picks.)

(A Top Pick July 18/14. Down 14.82%.) This was a dividend play and the problem with it was that it was full of oil. There is nothing wrong with this other than that it has oil. There may be some downside, but he is pretty much holding on for now.