iShares Core S&P/TSX Capped Composite Index ETF (XIC.TO)

The Canadian market got clobbered last year. This one has not fully recovered yet. He would not abandon ship. It has not made money because the market has not made any money. This is solid and he would not be selling it.

Basically the TSX composite index, 240 some companies listed in Canada, the entire Canadian market. He has been legging slightly back into the Canadian market in his model portfolios, and this is his core exposure.

Exposure to a broad market. It is well disposed toward someone who is a trader. For an investor, he would recommend XSP-T. You take away the currency risk.

Should you hold other ETFs directly that are held within this ETF? XIC-T is the broad TSX composite. You could sell and then overweight ZEB-T to overweight the banks, for example. Sector specific ETFs can be used instead to overweight certain sectors.

(Top Pick May 1/14, Up 6.23%) Has a lot of mid and small cap names. It should do better than XIU-T but he would expect the volatility to be higher.

(A Top Pick May 16/14. Up 7.47%.) The only reason he picked this over other similar ones is that they are optionable, and from time to time he likes to do a little hedging. Also, the fees have been chopped down to about 5 basis points.

There has been tremendous competition in ETFs in terms of MERs. The costs are not going to go lower than this because they make almost no money with this.

Likes this because the fees are so low on it that it has to be a core Toronto holding. He also likes it because it has options available on it.

(All 3 Top Picks are cheap, pure, tax effective and broadly diversified.) This now gives you access to the Canadian broad market for only 0.05% a year.