Topic: How To Invest

Q: Pat: Could I have your recommendation on Harvest Healthcare ETF (HHL): The ETF has a very high dividend. Is this ETF a good choice for income?

Article Excerpt

A: Harvest Healthcare Leaders Income ETF, $7.79, symbol HHL on Toronto, (Units outstanding: 156.0 million; Market cap: $1.2 billion;, holds a portfolio of 20 large-cap global healthcare companies. The fund’s manager selected them based on their perceived potential to provide attractive monthly income and long-term growth. The ETF holds mostly attractive stocks with sound long-term prospects. Holdings include Pfizer, Regeneron Pharmaceuticals, AbbVie, Zoetis, Thermo Fisher Scientific, Abbott Laboratories, Eli Lilly and Danaher Corp. The fund allocates an equal weight to every stock. Rebalancing takes place periodically when stocks that have gone up in price are reduced in weight. The fund then uses the proceeds to buy more of the stocks that have dropped. This equal-weighting approach has a number of negatives for investors. The ETF incurs ongoing brokerage charges as it rebalances its holdings. The approach may also cause the fund to buy more of a stock that has entered a long-term falling trend to a substantially lower price. It also forces…