Toronto-Dominion Bank

Investors looking to generate current income from their stock portfolios typically start by looking for the highest-yielding shares. However, exceptionally high yields can be a sign of trouble ahead—they can signal imminent dividend cuts. One way around that risk is to invest instead in stocks (or ETFs that hold them) with solid, sustainable dividends....

Even with the economic disruption brought on by COVID-19, we like the long-term prospects for investors in TD Bank. This Canadian big bank was as well prepared—and well capitalized—to handle the pandemic as it was the 2008-2009 financial crisis. We still see TD Bank as a top pick, especially given its expanding and profitable U.S....

A: iShares Canadian Financial Monthly Income ETF, $7.63, symbol FIE on Toronto (Units outstanding: 113.4 million; Market cap: $865.3 million; www.blackrock.com/ca), invests primarily in the common shares, preferred shares and corporate bonds of firms in the Canadian finance industry.


The fund charges investors an MER of 0.89%, which is high by ETF standards....

A: Preferred shares behave more like long-term fixed-income instruments rather than short-term instruments. So, while short-term interest rates are still relatively low, the outlook for long-term interest rates is less certain.

The underlying credit quality of preferred share issuers can be a negative factor in some cases; for example, when the issuer’s share price is falling.

So unlike GICs, which don’t fall in value, the prices of preferreds can decline along with stock markets.

If you want to own a preferred share as part of the fixed-income segment of your portfolio, and you can accept some risk, then preferreds are okay to hold....

We continue to recommend that most Canadian investors hold at least two or three of Canada’s Big Five banks (TD Bank, Bank of Nova Scotia, CIBC, Bank of Montreal and Royal Bank). That’s mainly because of their importance to the Canadian economy, plus their long history of dividend increases.

I asked our Successful Investor research department to draw up this Inner Circle Spotlight report on TD Bank....

Canadian dividends receive an extra tax benefit for Canadian investors. That’s just one reason why Canadian dividends should be a key component of a successful portfolio

Even with the economic disruption brought on by COVID-19, we like the long-term prospects for investors in TD Bank. This Candian big bank is as well prepared—and well capitalized—to handle the current shock as it was during the 2008-2009 financial crisis. We still see TD Bank as a top pick, especially given its expanding and profitable U.S....

A: iShares Canadian Financial Monthly Income ETF, $6.17, symbol FIE on Toronto (Units outstanding: 108.8 million; Market cap: $671.3 million; www.blackrock.com/ca), invests primarily in the common shares, preferred shares and corporate bonds of firms in the Canadian finance industry.

The fund charges investors an MER of 0.96%, which is high by ETF standards....

The Canadian economy ranks among the top 10 globally and has performed better than most of its large, developed peers over the past decade. The country is also among the top 15 most-competitive economies in the world; to date, it has fared relatively well at containing the COVID-19 pandemic....

BANK OF NOVA SCOTIA $55.88, is a buy. The bank (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $67.4 billion; TSINetwork Rating: Above Average; Dividend yield: 6.4%; www.scotiabank.com) has agreed to settle charges by U.S....