Recommended ETFs

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Hi there,
I’m going for the long-term Dividend Growth strategy.

So I’m looking for CAD ETF/index fund that tracks the S&P500 and also gives dividends. 2. Like XIT, is there one that tracks just the US tech sector? 3. One that tracks high dividend paying companies in Canada or US but in CAD? Like VYM Does that help? Thank you.

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Asked on August 26, 2020 10:26 pm
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Ever looked at VSP for an S&P ETF? It's currency hedged as well. Over the last while, the currency hedged ETF has far outperformed the non.

In terms of tech ETFs, that is a very good question. I know there is ETFs like ZQQ which track the NASDAQ. I mean this isn't exclusively a US tech ETF, but around 44% of it is. It's posted YTD returns of over 23% this year, so the outperformance is there too.

Now, in terms of an ETF like VYM, I'd say the closest would be XEI. But if you look at this ETF, it has been absolutely hammered this year, still down 22%. This is because a ton of our high dividend payers are oil and gas companies. You'll see major holdings in there like Pembina, Enbridge, TC Energy, Canadian Natural Resources.

This is more than likely going to be a problem with most Canadian high dividend ETFs, they contain too much exposure to oil and gas for my liking, and thus will probably lag in terms of overall returns over the next while.

XDV is a high yielding ETF that doesn't have as much exposure to the O and G sector, and as a result it's only down around 16% rather than the 22-25% from ones mentioned above. ZDV also isn't a bad option.

Ultimately, there are SO many products out there it's nearly impossible to narrow it down to select few. You've really got to find one that fits your style.

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Posted by Dan Kent
Answered on August 27, 2020 8:03 am