iShares S&P/TSX 60 Index ETF (XIU.TO)

XIU-T vs. individual shares. The TSX index is mostly financial and resources. He does not believe you should buy this weighting as you will be short on everything except financial and resources.

There are banks, insurance companies, a lot of oil and gas, and materials in this. It is tough when you have markets rising like this to jump in, but the fact that a lot of people are still scared, means that it is not a bad time.

The largest ETF in Canada. Every time it comes back to the support level, you want to be buying this. Look for retracements in order to start a new position. Risk/reward ratio is a little skewed right now. You want to Buy low and Sell high, so do you really want to be buying at the present levels? The longer-term perspective looks great.

His bias is for more diversification, foreign markets as opposed to Canadian markets. This is the largest ETF in Canada. It will have lots of dividend payers, so it will be fairly stable. Reasonably cheap. This is fine.

TSX-60. He was pretty sure at the beginning of the year that Canada would outperform because of oil bouncing back. He does not see a lot of upside because the market is valuing oil stocks now with oil at $60. It is not a good time to step in. He could still be wrong going forward.

This is the TSX 60 with a yield of 3% or so. It is relatively cheap. But will you be able to handle the ride with all the current volatility? If so, then he could recommend it.

He would like to see what happens over the next couple of days. The market was down today, but it wasn’t getting clobbered. Overnight markets were not so bad. There is no harm in getting in a little bit late.

This is heavily weighted by the banks, so if you believe we have a bull market and the banks are going to lead the way, it should help this. The only thing that is going to hold back is the materials and energy sector. There was a rally in energy, and it has now pulled back a little. If we get this new Bull next year, it is going to be a global expansion bull. He thinks this ETF could be alright. Dividend yield of 3%.

An ETF mix that would suit a self-directed RESP? He would have (CPD-T) iShares S&P/TSX Preferred iUnits as a fixed income component, (XIU-T) S&P/TSX 60 and TSX 60 as a Canadian component, and SPDR S&P 500 (SPY-) as the US component, and would split this as you have an RESP. Rebalance once a year.

What concerns him about the TSX60 is the quality of the constituents. If you want something low volatility with a growing dividend, you are better to buy iUnits S&P Financial (XFN-T), the financial services ETF. It has a good yield on it and the banks continually raise their dividends.

The rebound bull did not make a new high. We are now fighting to make a new all time high. It will go on for a while. He would not invest broad based but in specific sectors.

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

iShares TSX 60 (XIU-T) or iShares S&P 500 Cdn Hedged (XSP-t) because of energy? We have had far more exposure in Canada to oil prices than the US. This has led to a decline in the Cdn$, but at the same time we have to look at the opportunity that creates for Canadian exporters, and there could be a lot of business coming out of this as a result. He has not been selling these, but if you are inclined to do so, you could lighten up on them and buy the XSP, especially if you don’t have American exposure.

(A Top Pick April 25/13. Up 21.32%.) This is a core holding for him.

For a TFSA account? This is the largest ETF in Canada by a large margin and it’s cheap. Most large-cap stocks get dividends. He wouldn’t worry much about dividends in an ETF. The dividend tax credit is more of an opportunity cost that you forgo. Any dividends that you earn in a TFSA are tax-free. If you had them in a taxable account you get tax preferred income but in a TFSA you don’t pay any tax at all.