# The Very Best of the Canadian Equity ETF's



## Belguy (May 24, 2010)

With the proliferation of Canadian equity ETF's over the recent past, it is getting more and more difficult to choose from among them.

If you had to choose your top favourites, which would they be?

Maybe we could narrow the list down to our own summary of our 'best of the best'.

Any thoughts? :encouragement::cool2::joyous:


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## dubmac (Jan 9, 2011)

Hey Belguy - great to see your monicker on the screen - I have missed you, and thought about how you have managed in a difficult time. - now to business - 
Check out today's Globe & Mail - ROB. They have an great article titled "The Worldly Investor" B11. http://www.theglobeandmail.com/globe-investor/the-worldly-investor/article11583998/?from=11583742
It helped me to narrow my decisions as I need (desperately) to broaden my investment pf to include beyond TSX. Mawer Int. Eq Fund is identified as a great one. Hope this helps.


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## Belguy (May 24, 2010)

Thanks, dumac. The international ETF, which I hold, is Vanguard VEA with a MER of 0.12% and a one year return of 10.92%

It is one of my 'buy and hold forever' investments.


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## eulogy (Oct 29, 2011)

I like ZCN. And lately HXT has been temping. Of the two, ZCN is the more broad of the two.


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## Belguy (May 24, 2010)

Here is the link to ZCN:

http://www.etfs.bmo.com/bmo-etfs/glance?fundId=72048&WT.ac=E12925_ad1e_Eetftes1_zcn

How does this stack up against other Canadian equity ETF's?


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## Belguy (May 24, 2010)

My Canadian equity ETF holding is VCE:

https://www.vanguardcanada.ca/individual/etfs/etfs-detail-overview.htm?portId=9554

How does this stack up against, for example, HXT?

http://www.horizonsetfs.com/pub/en/etfs/?etf=HXT&tab=video


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## humble_pie (Jun 7, 2009)

thumbs down on HXT because:

1) too much counterparty derivative risk

2) same reason - too much counterparty derivative risk - will cause the CRA to punish this fund & its unitholders under recently-announced new rules


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## GoldStone (Mar 6, 2011)

Very little separates XIU, VCE and ZCN. They are poorly diversified by sector.

Three sectors dominate: Financials, Energy and Materials.

The weight of top 3 sectors:

XIU: 74%
VCE: 78%
ZCN: 73%

Long term performance will be virtually identical.

Energy and Materials are highly cyclical. They do well when the world economy is booming. They do poorly in the period of slow growth like the one we experience now.


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## lonewolf (Jun 12, 2012)

According to wikapidia (date unknown) there is no etf that tracks the s&P/tsx. If the etfs XMD & XIU are used they will replica the s&p/tsx. I dont bother playing the Canadian market there is so much more data from research available for the more liquid markets South of us.


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## Squash500 (May 16, 2009)

lonewolf said:


> According to wikapidia (date unknown) there is no etf that tracks the s&P/tsx. If the etfs XMD & XIU are used they will replica the s&p/tsx. I dont bother playing the Canadian market there is so much more data from research available for the more liquid markets South of us.


 I think that the XIC tracks the S&P/TSX?


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## andrewf (Mar 1, 2010)

HP, I see your point about counterparty risk, but to play devil's advocate, I would say:

1) The way Horizons has structured these swaps require the counterparty to have liquid, high quality collateral to cover 90% of the AUM of the fund. At any rate, counterparty risk is not unique to HXT, as all the 'physically-backed' ETFs engage in securities lending of some sort. 

2) The recent tax changes do not seem to affect HXT. And if the government intends to change the tax treatment of total return swaps, then the implications are going to go far beyond funds like HXT.


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## MRT (Apr 8, 2013)

Belguy said:


> Thanks, dumac. The international ETF, which I hold, is Vanguard VEA with a MER of 0.12% and a one year return of 10.92%
> 
> It is one of my 'buy and hold forever' investments.


Did you decide on a separate ETF for emerging markets (like VWO)?

I was looking at VEA as well, plus something for EM, but have also been considering VXUS alone. It has a moderate EM portion (just under 20%) though does have some CDN overlap...


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## Belguy (May 24, 2010)

MRT said:


> Did you decide on a separate ETF for emerging markets (like VWO)?
> 
> I was looking at VEA as well, plus something for EM, but have also been considering VXUS alone. It has a moderate EM portion (just under 20%) though does have some CDN overlap...


Yes, 5 per cent of my portfolio is in emerging markets via VWO. This is another buy-and-hold forever investment (aside from trading for rebalancing purposes).


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## Belguy (May 24, 2010)

An age old question--If you decided to go with iShares, would it be XIC or XIU?

http://ca.ishares.com/product_info/fund/overview/XIC.htm

http://ca.ishares.com/product_info/fund/overview/XIU.htm


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## Belguy (May 24, 2010)

What are your thoughts on XCV?

http://ca.ishares.com/product_info/fund/overview/XCV.htm


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## Belguy (May 24, 2010)

Is there any compelling reason to include XCS as part of a diversified portfolio?

http://ca.ishares.com/product_info/fund/overview/XCS.htm

From the chart, it doesn't seem to be going anywhere fast.


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## GoldStone (Mar 6, 2011)

Belguy, flip a coin.

XIC or XIU or VCE or ZCN... doesn't really matter. Sector allocation is the same. 75% financials, energy and materials, give or take a few percentage points. Long term performance will be virtually identical.


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## Belguy (May 24, 2010)

I was looking at a chart for XIU this morning. It is virtually where it was 20 MONTHS ago.

The President's Choice high interest account would have been a better choice over the past 20 months!!!


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## andrewf (Mar 1, 2010)

You're forgetting dividends. Everyone forgets dividends...


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## Eclectic12 (Oct 20, 2010)

andrewf said:


> You're forgetting dividends. Everyone forgets dividends...


All too true ... :biggrin:


Cheers


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## Sampson (Apr 3, 2009)

andrewf said:


> You're forgetting dividends. Everyone forgets dividends...


I thought the problem was people focused too much on dividends... 

Either way you slice it, I wish there was some way to calculate the total return of a holding. From this day forth, we could call it Total Return.


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## andrewf (Mar 1, 2010)

Indeed, total return is what matters. You could use Bloomberg for charts, as they are total return charts. Or you can use Yahoo Finance historical prices. The adjusted price adjusts for dividends, splits, etc.


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## CanadianCapitalist (Mar 31, 2009)

Belguy said:


> I was looking at a chart for XIU this morning. It is virtually where it was 20 MONTHS ago.
> 
> The President's Choice high interest account would have been a better choice over the past 20 months!!!


Belguy, if you have to be invested in stocks, you need to have some patience. Stocks come with no guarantees -- no guarantees that you'll make x percent over 1 year or 2 years or 20 years. If you find yourself worrying too much about stock market fluctuations, it may mean you need to consider dialling down your allocation.


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## andrewf (Mar 1, 2010)

What Belguy needs to do is look at his portfolio exactly once a year, and the rest of the time do something better with his time.


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## none (Jan 15, 2013)

andrewf said:


> What Belguy needs to do is look at his portfolio exactly once a year, and the rest of the time do something better with his time.


This is great advice - something I wish I could do. I find the desire to play the day-to-day fluctuations of stocks almost irresistible (although I've managed to resist it). 

This, however, is what is keeping me from jumping into a S&P ETF as it seems like if I wait a month then some sort of correction should occur. Of course, I said that last month...... urg.


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## andrewf (Mar 1, 2010)

If it helps, tell yourself you will do half now, and the other half in a month.


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## HaroldCrump (Jun 10, 2009)

andrewf said:


> What Belguy needs to do is look at his portfolio exactly once a year, and the rest of the time do something better with his time.


Seems like the movie _Groundhog Day_.
We have had this type of discussion every few months since 2009.
Like clockwork.


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## none (Jan 15, 2013)

andrewf said:


> If it helps, tell yourself you will do half now, and the other half in a month.



I think I may just do that. It's a silly book keeping annoyance as doing this will make my portfolio a little messy to look at because of the locked-in / not locked in RRSP issues. Anyway, that's not something that should really factor into things and i just need to get it done.

I will buy them tomorrow regardless of ETF price. Thanks.


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## GoldStone (Mar 6, 2011)

Dump XIU. Buy DXJ. It's the hottest ETF out there. 50% up in 6 months.

Sell Low, Buy High.
Perfect Strategy, For Bel Guy.


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## Belguy (May 24, 2010)

GoldStone said:


> Dump XIU. Buy DXJ. It's the hottest ETF out there. 50% up in 6 months.
> 
> Sell Low, Buy High.
> Perfect Strategy, For Bel Guy.


Thanks, Goldstone!! Maybe it's time to dump my diversified portfolio and put it all into this Japan ETF!!!

http://www.wisdomtree.com/etfs/fund-details.aspx?etfid=18

On second thought, maybe not.


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## Belguy (May 24, 2010)

Say what you will, but I am an investor and not a trader. I have held my portfolio, pretty much in it's current form, for many years now and only trade annually for rebalancing purposes.

I think that I am somewhat more stable in this regard than many of the market timers on this forum.

Buy, hold, rebalance and prosper.:02.47-tranquillity:eaceful::untroubled::calm:


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## Squash500 (May 16, 2009)

andrewf said:


> What Belguy needs to do is look at his portfolio exactly once a year, and the rest of the time do something better with his time.


 Andrew that's easier said then done---LOL. I look at my portfolio about 20 times a day. If my ETF's like XRE, XDV etc go down by more than 10% then I'm selling them or at least some of my position. I don't believe in just looking at your portfolio only once a year.


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## Belguy (May 24, 2010)

Conclusion: When it comes to choosing which Canadian equity ETF you choose to include in your 'Easy Chair' portfolio, it doesn't really matter much which one you choose and so you might as well choose the broadest-based ETF with the lowest fee.

Do I have that right?


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## lakota (Apr 3, 2009)

Zlb
zdv
zwa
fie
xtr
zwb


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## eulogy (Oct 29, 2011)

andrewf said:


> What Belguy needs to do is look at his portfolio exactly once a year, and the rest of the time do something better with his time.


I agree with this. Watching it is just stupid if you're just index investing. I used to watch things like a hawk and my mood would rise and fall based on the outcome. But I was index investing, so it wasn't like I was going to touch it. The endless mental gymnastics looking at various portfolio changes that might squeeze out an extra basis point of earning... it's really just mental masturbation.

I stopped looking. It's great.


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