royal bank

Higher interest rates mean dividend-paying stocks must increasingly compete with fixed-income investments for investor interest. However, sustainable dividends still offer an attractive and growing income stream for investors.


Meanwhile, dividend-focused ETFs often follow strategies that can set investors up for maximum long-term gains with the least amount of risk....

Since March 2022, the Bank of Canada has raised its benchmark interest rate 10 times, from just 0.25% to 5.0%. The rapid increase is meant to counter rising inflation in the wake of the COVID-19 pandemic and related supply chain disruptions. So far, the plan is working: Canada’s inflation rate has dropped from its peak of 8.1% in 2022 to 4.0% in August 2023.

While rising interest rates let banks earn higher interest on their loans, accounting rules also force banks to set aside more funds to cover any rise in loan defaults as borrowers face those higher interest payments....

The shares of Royal Bank and other big Canadian banks have suffered in the past year as rising interest rates increase the appeal of bonds. Higher interest rates also increase the likelihood of greater loan defaults.


We see Royal as a particularly attractive buy right now as it looks like the current cycle of rising interest rates has peaked....

Many financial stocks, and especially banks, suffered big drops in early 2023. That was after the high-profile failures of several U.S. regional banks, including Silicon Valley Bank.


Going forward, the outlook for Canadian banks is more stable than for U.S....

Royal Bank is the partner of BlackRock for the distribution of the iShares ETFs in Canada. But the Royal Bank platform also hosts a considerable number of RBC branded ETFs. The Bank recently expanded its ETF roster by adding RBC-branded ETFs that mirror existing actively managed mutual funds.


RBC NORTH AMERICAN GROWTH ETF $20.47 (NEO exchange symbol RNAG) invests in U.S....

High interest rates mean dividend-paying stocks must increasingly compete for investor interest with bonds and other fixed-income instruments. However, focusing on sustainable dividends still offers an attractive and growing income stream for investors—as long as you avoid the riskier strategies that some ETF managers use to boost their yields (see supplement on page 60).


Here are three ETFs that aim to provide high-yield exposure to Canadian, as well as U.S., dividend payers.


VANGUARD FTSE CANADIAN HIGH DIVIDEND ETF $42.00 (Toronto symbol VDY; TSINetwork ETF Rating: Aggressive; Market cap: $2.1 billion) tracks the FTSE Canada High Dividend Yield Index....

Here’s the second part of our discussion on ETFs representing each of the five main economic sectors. Here we cover ETFs in Resources, Manufacturing and Financials.


ISHARES MSCI GLOBAL METALS & MINING PRODUCERS ETF $42.96 (CBOE symbol PICK; TSINetwork ETF Rating: Aggressive; Market cap: $1.6 billion) provides investors with exposure to companies involved in the exploration, production, refining, and marketing of a diversified basket of metals.


The ETF tracks the MSCI ACWI Metals and Mining Producers Index and invests globally; its main country exposures are to Australia (27%), the U.S....

Short answers to current issues of importance for Canadian investors:

Q: Pat, do you think this Silicon Valley Bank (SVB) collapse is powerful enough to set off a broad slump in the North American or even the world banking industry, something like the 2008/2009 downturn?

A: I doubt it....

Through a series of sharp interest rate increases to curb inflation, the Bank of Canada raised its benchmark rate from just 0.50% in March 2022 to today’s 4.50%.


Higher interest rates are generally good news for banks, as those lenders earn higher interest rates on their loans....

A: Hamilton Enhanced Canadian Bank ETF, $21.63, symbol HCAL on Toronto, (Units outstanding: 18.7 million; Market cap: $404.5 million; hamiltonetfs.com) aims to track the Solactive Canadian Bank Mean Reversion Index.

This index invests in the biggest six Canadian banks—Bank of Nova Scotia, Bank of Montreal, CIBC, Royal Bank, TD and National Bank....