iShares Diversified Monthly Income ETF (XTR.TO)

It is a balance income fund. It includes bonds. It is good for a long term holding. It is a nice diversified way to get exposure across the sector, but is concentrated in Canada. Combine it with CYH-T.

This is only a fund of funds. All it does is invest in other ETF’s. He doesn’t see any upside in these.

6-7% payout. Nothing in it pays that much. A lot of the sectors in it are more volatile now. He does not see anything better. When things pull back you buy them then sell them when they rally. The passive buy and hold strategy is not going to serve people.

Bonds, preferreds, Utilities, REITs and High Yield Dividend Stocks. It is pretty well diversified, but tilted to fixed income. It pays out 7%, but what’s in it does not return that much so you are getting some capital back. He does not like that. He likes it as a holding for diversification, but not for growth over the next year.

This used to be the income trust units, until there was the Halloween massacre a few years ago. It is sort of a mixed bag of different ETF’s. It is down now basically because of oil prices. There is nothing wrong with the product.

His understanding is that this is much more heavily skewed towards the actual bond and government, corporate preferred shares, and less so to dividend income type streams. You are not going to get what you need out of the bond side. It is going to be very, very low returns.

This has basically become a fund of ETF’s. It has probably gotten beaten up because a lot of the stocks are in oil. For a long-term investor, he wouldn’t be anxious to dump it. It is probably paying a pretty good yield now.

It is more into fixed income which is shorter term. There is nothing in those holdings yielding what the ETF yields, so you are getting some of your own money back. He would suggest looking at his own global dividend fund (BMO Fund). Ishares has one like it also. These are ideal because their balance between fixed and equity shifts with conditions.

The concern people have with this is how distributions are grinding down the NAV, so he doesn’t know if distributions are sustainable. He doesn’t really like any income product. Cash or GICs are going to be as good as any kind of a bond ETF, because of rates being so ridiculously low.

This is an ETF of ETF’s. It is a balanced portfolio of about 60% fixed income and 40% in equity of income generating types of things. Interest rates in general as they move up, do affect income investments, so some parts of things in this portfolio are going to get affected. This will pay you a pretty decent income, and he feels the risk is relatively low.

The problem with this is that there is a certain amount of return of capital, rather than return on capital. Doesn’t particularly like this one. He thinks they may have improved this over the last year or so. Always take a look at yield. If it is a lot higher than the bank rate, there is a reason. Quite often is because you are getting back some of your own money.

This is actually the leftovers of the income trust fiasco of a few years ago. They have now added a whole bunch of other components, such as corporate and government bonds. The only thing is that you should never trust yield. If you are looking at just the current yield, you have to go back into the web sight of the ETF provider. They are very candid about what is in their funds. Look at the yield to maturity and the credit risks, and then see what the trailing yield is. You want to see the “yield to maturity”.

A basket of other ETFs. If interest rates skyrocket, nothing will protect you. But he thinks interest rates will stay low for years and years to come. You get a return on capital from this one in the 6% payout.

As a full position in an RRSP? When you get the quote, it shows the yield as about 5.8%, but if you look at the components of this ETF, corporate bonds, high yields, rates, etc., none of them add up to 5.8%. The reason is that there is a return of capital. There is a big difference between return “on” capital and return “of” capital. You are not really getting 5.8%, but actually about 4.5%.

What would you think of this as a full position in an RRSP? This is a conservative position, but nonetheless, he would not use this as a full position in a registered plan.