royal bank

ISHARES MSCI CANADA INDEX FUND $25.90 (New York symbol EWC; buy or sell through brokers; ca.ishares.com) holds the stocks in the Morgan Stanley Capital International Canada Index. The fund has a 0.48% MER and yields 1.6%.

The index’s top holdings are Royal Bank, 7.2%; TD Bank, 6.4%; Valeant Pharmaceuticals, 6.0%; Bank of Nova Scotia, 5.1%; CN Railway, 3.9%; Suncor Energy, 3.3%; Enbridge, 3.3%; Bank of Montreal, 3.1%; and Manulife Financial, 3.0%.

If you want to own a Canadian index fund, you should buy the iShares S&P/TSX 60 Index Fund (see previous page). You’ll pay about a third of the management fees.

...

ISHARES CANADIAN SELECT DIVIDEND INDEX ETF $23.07 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highestyielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of the ETF’s assets. The fund’s MER is 0.55%, and it yields 4.5%. The fund’s top holdings are CIBC, 8.5%; Bank of Montreal, 6.3%; Royal Bank, 6.3%; Bank of Nova Scotia, 5.4%; BCE, 5.3%; Laurentian Bank of Canada, 4.4%; IGM Financial, 4.3%; TD Bank, 4.1%; National Bank, 4.1%; Rogers Communications, 4.1%; and TransCanada Corp., 4.0%.

The ETF holds 53.7% of its assets in financial stocks. The top Canadian finance stocks have sound prospects, but if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.

...

ISHARES S&P/TSX 60 INDEX ETF $21.18 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.18% of assets, and it yields 3.0%.

The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include. The index’s top holdings are Royal Bank, 7.9%; TD Bank, 7.1%; Valeant Pharmaceuticals, 6.6%; Bank of Nova Scotia, 5.6%; CN Railway, 4.2%; Suncor Energy, 3.6%; Enbridge, 3.6%; Bank of Montreal, 3.4%; BCE, 3.3%; Manulife Financial, 3.3%; Brookfield Asset Management, 2.8%; and Canadian Natural Resources, 2.6%.

iShares S&P/TSX 60 Index ETF is a buy.
...

A number of Canadian bank chief executives have voiced concerns about the threat Apple Pay and similar services pose. Apple Pay lets users pay for items using bank-credit and debit cards stored on their iPhones and Apple watches. The CEOs believe these services might not only erode their fees but could interfere with the banks’ relationships with their customers. U.S. banks were quick to join up with Apple Pay, for fear of losing out to rival banks. But the rush happened before secure credit card systems could be set up, resulting in higher fraud rates from thieves using stolen card numbers on Apple Pay....

BANK OF NOVA SCOTIA, $64.37, Toronto symbol BNS, is paying an undisclosed sum to Citigroup (New York symbol C) for its retail-banking operations in Panama and Costa Rica, including 27 branches. The bank expects to close the deal in the next few months. The move will nearly triple its customer base in these two countries, from 137,000 to 387,000. It will also make Bank of Nova Scotia the second-largest credit card provider in both nations, with 18% of the market in Panama and 15% in Costa Rica. The bank entered Panama in 1974 and Costa Rica in 1995. This long history cuts the risk of expanding in these countries....

A number of Inner Circle have asked two key questions about so-called “robo-advisors”—automated, Internet-based advisory/portfolio management services. Question 1. Will robo-advisors offer valuable new investment avenues for individual investors? They may offer beginning investors a more efficient, lower-cost investment approach, compared to what’s now open to them. Unfortunately, robo-advisors are likely to focus on the less reliable of the two main investment approaches....

Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index. ETFs trade on stock exchanges, just like stocks. That’s different from mutual funds, which you can only buy at the end of the day at a price that reflects the fund’s value at the close of trading. Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds....

We think the big banks remain some of the strongest Canadian dividend stocks, but warn against buying them through this split share company.

Canadian Banc Corp. is a split-share company with two types of stock: capital shares ($12.85, symbol BK on Toronto) and preferred shares ($10.26, symbol BK.PR.A on Toronto). The company holds shares of the six biggest Canadian banks. Split-share companies typically issue two classes of stock. Usually the capital shares get all or most of the capital gains and losses, as well as variable dividend income, and the preferred shares get a fixed amount of dividend income....

Meta Description: Exchange-traded funds (ETFs) give investors a low-fee way to match market indexes, and these two ETFs are the cream of the Canadian crop.