Topic: How To Invest

Q: Pat, can I get your recommendation on the iShares Core MSCI Canadian Quality Dividend Index ETF (XDIV)? I am looking at it for its dividend income. Thanks.

Article Excerpt

A: iShares Core MSCI Canadian Quality Dividend Index ETF, $24.80, symbol XDIV on Toronto (Units outstanding: 31.5 million; Market cap: $781.2 million;, tracks the MSCI Canada High Dividend Yield 10% Security Capped Index. This index aims to invest in Canadian stocks with above-average dividend yields and steady or increasing dividends. It also targets stocks with strong overall financials, including solid balance sheets and less volatile earnings. The weight of any one stock in the portfolio is capped at 10%. The industry breakdown of companies in the fund is as follows: Financials (51.3%), Communications (18.4%), Utilities (16.3%), Consumer Discretionary (10.0%), Energy (1.9%) and Mining (1.8%). Investors who hold this ETF should adjust their overall portfolios to counterbalance the fund’s heavy concentration in Finance. The fund launched in July 2017 and charges a 0.11% MER. It yields a substantial 4.0%—not unusual for an investment that is heavy on financial stocks and utilities. We like most of the stocks this ETF holds. However, we see the…