# Building an ETF Portfolio for Monthly Income



## Belguy (May 24, 2010)

From National Bank Financial, here is a suggested portfolio of ETF's to generate monthly income in an non-registered account:

iShares Dow Jones Canada Select Dividend Index Fund (XDV) 27%
Claymore Global Monthly Advantaged Dividend ETF (CYH) 17%

iShares DEX Universe Bond Index Fund (XBB) 33.7%
Claymore S&P/TSX Preferred Share ETF (CPD) 11.3%

iShares S&P/TSX Capped REIT Index Fund (XRE) 5.4%
iShares U.S. High Yield Bond Index Fund (XHY) 2.8%
Claymore Advantaged High Yield Bond ETF (CHB) 2.8%

MER 0.45%

Any thoughts or suggestions?


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## briant (Jun 23, 2009)

Curious why you left out CDZ in the portfolio.


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## ledtim (Sep 4, 2010)

I wouldn't put a bond fund in a non-registered account, but if I really had to, (and I wasn't in a very low tax bracket), I'd get CAB.to rather than XBB.to, since that's taxed as return-of-capital. 

Biggest redundancy is getting both XHY and CHB, especially when combined, they are about 5% of your portfolio. I'd get CHB.to over XHY.to for the same reason as CAB over XBB.

If you want to save some trading commissions and don't mind losing the ability to customize your own income portfolio, ishares (XTR) and claymore (CBD) offers income wrap etfs.


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## kcowan (Jul 1, 2010)

This is for a couch potato? Why are you second-guessing your existing portfolio?


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## Belguy (May 24, 2010)

I am not second guessing anything but just came across this idea for a monthly income from an ETF portfolio and thought it would be of some interest to others.

I do post quite a few thoughts and ideas that I don't necessarily adopt for myself but which I found nonetheless interesting.

Just as an afterthought, I heard today that the U.S. economy is currently growing at 2 1/2 times the rate of growth in Canada which I found interesting given all of the dire predictions about things down there.

Also, the Chinese markets are down on the month.


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## larry81 (Nov 22, 2010)

ledtim said:


> I wouldn't put a bond fund in a non-registered account.


for someone with a much larger non-reg account that reg one, how would manage a proper asset allocation ? sure bonds in non-reg are fully taxable and much better held in a reg-account but that dont auto-exclude them from non-reg...


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## dogleg (Feb 5, 2010)

Belguy: Glad to see you are alive and well. I have been out of action as far as posts go due to a summer disease called golf. I am once again helping a friend (aunt retired ,teacher) to consolidate some RIF money. I don't know much about mutual funds and don't want to ,however, I think she needs to get rid of a collection of them she has at one bank. I would welcome your opinion and from others again as I did earlier with some other accounts she had . She has CI Sig. Sel., CIBC MOnthly income, Sig. Cdn. Bond Fund, Trimark Cdn. First Class. plus some GICs and bonds in this account. It seems to me she could do with just one or none of the above. Maybe replace them with an ETF or two. This account only represents about 25% of her money. Thanks for your help.


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## Belguy (May 24, 2010)

Hi, dogleg!! Glad that you have returned to the land of the living!!

In the interest of simplicity, I could do worse than to refer you to the model portfolios at www.canadiancouchpotato.com

I believe in buying and holding a diversified portfolio of the lowest fee, broadest based ETF's and to keep one's portfolio short for ease of management and rebalancing purposes.

This is the best way unless you consider yourself a market beater and that is hard to do.

You will need a discount brokerage account at the firm that will give you the lowest trading fee.

The most important thing is to set up an appropriate asset allocation target that will allow you to sleep at night through all market conditions and then select the individual ETF's for the portfolio and then trade only for periodic rebalancing purposes.

I hope that this helps but please post any other questions that you may have as we are all here to learn.


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## osc (Oct 17, 2009)

Buy IWM and sell weekly covered calls (taxed as capital gains). US will outperform Canada in the next couple years and there is enough diversification in Russell 2000. I wouldn't get anywhere near bonds at this moment.


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