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My personal take HDIF vs HDIV

Despite having a higher MER, HDIV appears to be a more favorable option for income-oriented investors, boasting a superior yield and total return. It’s crucial to consider that this comparison relies solely on a one-year historical analysis, making it unjust to declare a decisive winner within such a limited timeframe. Both funds operate as covered call ETFs, generating monthly income through premiums from option-selling activities. Additionally, they fall under the category of funds of funds, composed of various ETFs. (HDIF vs HDIV)

While HDIF exclusively invests in Harvest-issued ETFs, HDIV takes a more diversified approach by including ETFs from BMO, Hamilton, Horizons, and others, positioning itself better in terms of diversification.

Both ETFs share similar drawbacks, particularly the covered call strategy employed by both, limiting upside potential for the portfolio.

Both funds utilize 25% leverage, which has the potential to increase yields and performance but also introduces additional risk, especially in a high-interest rate environment.

It’s essential to recognize that both funds cater to a specific niche of investors prioritizing income. While I personally advocate for investors to seek a balance between growth and income, I caution that, in the long run, covered call ETFs may exhibit unstable yields and underwhelming total return (price performance + dividend yield).

Executive summary HDIF vs HDIV

Aspect	HDIF	HDIV
Investment Approach	Fund of funds, diversified portfolio of Harvest’s ETFs	Fund of funds, diversified portfolio of ETFs
Primary Objective	Higher yield through covered call strategy + Moderate potentiel growth	Higher yield through covered call strategy + Moderate potentiel growth
Underlying Holdings	Harvest’s covered call ETFs	Seven covered call ETFs from different issuers (sector-focused ETFs)
Yield	11.39%	12.21%
Leverage	25% leverage	25% leverage
MER (Management Expense Ratio)	1.98%	2.39%
Risk Management	Covered call strategy on up to 33% of equity securities	Unknown
Frequency of Dividend Distribution	Monthly basis, consistently at the targeted rate	Monthly basis, consistently at the targeted rate

Performance comparison

Investment objective

HDIF: Harvesting Diversification for Enhanced Monthly Income

Harvest Diversified Monthly Income ETF (HDIF) takes center stage as a unique fund of funds, delving into diverse sectors. This article unveils its covered call strategy and explores its distinctive approach, focusing on delivering high yields through dividends and premiums. With a target yield exceeding 9%, HDIF offers consistency in monthly dividends and the allure of 25% leverage at institutional rates, all at a competitive Management Expense Ratio (MER) of 1.98%.

HDIV: Harvesting Global Investments for Income and Stability

Harvest Global Investments Ltd. introduces HDIV, a passive covered call ETF designed for income-seeking investors with a penchant for low volatility. This segment delves into HDIV’s strategic investment in seven covered call and sector-focused ETFs, emphasizing large corporations. Unraveling its risk management approach and expense structure, HDIV showcases a nuanced path for investors aiming for both yield and stability, sporting a MER of 2.39% and an expense ratio of 0.65%.

Under the Hood: Unveiling Their Underlying Holdings

This section peels back the layers, comparing the underlying holdings of HDIF and HDIV. HDIF’s venture into Harvest’s covered call ETFs contrasts with HDIV’s meticulous selection of seven ETFs from different issuers, aligning with its focus on large corporations. The common thread? Both deploy covered call strategies, introducing an extra income stream while navigating the complexities of risk management.

HDIF

Ticker	ETF Name
HTA	Harvest Tech Achievers Growth & Income ETF
HBF	Harvest Brand Leaders Plus Income ETF
HLIF	Harvest Canadian Equity Income Leaders ETF
HHL	Harvest Healthcare Leaders Income ETF
HUTL	Harvest Equal Weight Global Utilities Income ETF
HUBL	Harvest US Bank Leaders Income ETF
TRVI	Harvest Travel & Leisure Income ETF

Please visit issuers’ website for most up-to-date data

HDIV

TICKER	NAME	WEIGHT
NXF	CI Energy Giants Covered Call ETF	20.9%
HMAX	Hamilton Canadian Financials Yield Maximizer ETF	18.7%
HFIN	Hamilton Enhanced Canadian Financials ETF	18.3%
GLCC	Horizons Gold Producer Equity Covered Call ETF	18.0%
HTA	Harvest Tech Achievers Growth & Income ETF	17.1%
HHL	Harvest Healthcare Leaders Income ETF	16.2%
UMAX	Hamilton Utilities Yield Maximizer ETF	12.3%
HUTS	Hamilton Enhanced Utilities ETF	3.8%

Covered Call ETFs: High Yields or Hidden Hazards?

Full review of ZWU – BMO Covered Call Utilities ETF

What HDIV Accomplishes for Investors:

High Monthly Income

With high average yield of approx. 12%, HDIV is structured to deliver consistent monthly income. This makes it attractive for investors who rely on regular cash flows, such as retirees or income-seekers.

Source: Hamilton website

The chart compares the growth of $100K invested in HDIV versus the S&P/TSX 60 from July 2021 to July 2024. Over this period, HDIV has significantly outperformed the S&P/TSX 60.

HDIV grew to $144K, while the S&P/TSX 60 reached $128K, highlighting HDIV’s superior returns.
The chart shows that HDIV’s growth was more pronounced during market recoveries and periods of steady gains. This is likely due to the ETF’s covered call strategy, which generates additional income through option premiums, boosting returns.
While both investments experienced volatility, HDIV offered higher income through its regular dividends, helping it to outpace the index.

This performance makes HDIV appealing for investors seeking both income and growth, although they should be aware of the capped upside in bull markets.

Low Volatility Exposure

By holding a diversified basket of covered call ETFs across key sectors like financials, utilities, healthcare, energy, and gold, HDIV reduces overall portfolio volatility. Covered call strategies help cushion market declines by generating income through premiums, which helps offset losses.

Diversification Across Key Sectors

HDIV provides exposure to a variety of sectors that are less correlated with each other, helping investors balance risks. HDIV addresses the lack of sector breadth in the Canadian equity market by diversifying beyond the S&P/TSX 60. The Canadian market is heavily concentrated in sectors like financials, energy, and utilities, with fewer options in technology and healthcare. To counterbalance this, HDIV invests in the larger U.S. technology and healthcare sectors via its Hamilton Technology YIELD MAXIMIZER™ ETF (QMAX) and Hamilton Healthcare YIELD MAXIMIZER™ ETF (LMAX). This approach provides better diversification than the S&P/TSX 60, giving investors broader exposure while maintaining similar sector allocations for stability and income generation.

Enhanced Growth Potential with Cash Leverage

HDIV employs a 25% cash leverage to boost returns, aiming to outperform traditional covered call strategies. While leverage can increase both gains and losses, HDIV’s diversified sector exposure makes this approach more balanced.

Key Considerations before considering HDIV:

Downside Risk: While covered call strategies provide income, they also cap upside potential in strong bull markets. Investors may see underperformance compared to broad market indices during rapid market rallies.

MER and Expenses: The management expense ratio (MER) of HDIV is relatively high at 2.39%, which could reduce net returns over time.

Income vs. Growth — Should You DRIP or Take Cash?

Investors in covered call ETFs often prioritize generating regular monthly income, focusing less on overall portfolio growth. For these income-focused investors, opting for cash distributions may be the best choice to support their cash flow needs. However, for those aiming to build long-term wealth, a Distribution Reinvestment Plan (DRIP) can be a powerful strategy.

In a DRIP, instead of receiving monthly cash payments, investors automatically reinvest their dividends to purchase more units of the ETF. This allows for compounding growth over time, which can significantly increase the value of a portfolio in the long run.

To illustrate this, let’s compare the outcomes of two $100K investments in HDIV (since inception):

One portfolio that takes cash distributions.
Another that participates in a DRIP.

Over time, the portfolio using DRIP can accumulate more units, potentially leading to greater overall value due to compounding, while the cash distribution portfolio prioritizes immediate income. Choosing between these strategies depends on your financial goals—whether you prefer immediate income or are focused on long-term growth.

Conclusion: Expected Outcome for HDIV Investors

Investors can expect steady monthly income and lower volatility with HDIV. However, they should be prepared for capped upside potential in strong markets. The ETF is ideal for conservative investors seeking income, or for tactical plays during market downturns by growth investors looking to mitigate risk.

Video

When comparing the iShares Core S&P U.S. Total Market Index ETF (XUU.TO) and the Vanguard U.S. Total Market Index ETF (VUN.TO), both offer Canadian investors broad exposure to the U.S. stock market. However, there are a few key differences between these two ETFs that might help you decide which is better suited to your investment strategy. Let’s take a closer look at the main differences in terms of the index they track, fund management, fees, and other factors.

1. Index Tracked

One of the main differences between XUU and VUN is the index they track. XUU follows the S&P Total Market Index, while VUN tracks the CRSP U.S. Total Market Index. Although both indexes aim to cover the entire U.S. stock market, including large, mid, small, and micro-cap stocks, there are slight variations between them.

S&P Total Market Index (XUU): This index includes over 3,000 U.S. stocks, representing nearly 100% of the investable U.S. equity market. The S&P index is widely recognized and commonly used in many investment products.
CRSP U.S. Total Market Index (VUN): This index covers a slightly smaller number of stocks, around 4,000, but the overall exposure is quite similar to that of the S&P Total Market Index. The CRSP index uses a different methodology for categorizing companies by market cap, which can lead to slight differences in holdings and weightings compared to the S&P index.

While these differences are small, they can lead to slight variations in performance over time. However, for most investors, the impact is usually minimal.

2. Fund Management

Another key difference is the fund manager. XUU is managed by BlackRock under its iShares brand, while VUN is managed by Vanguard. Both companies are highly respected in the ETF world and offer low-cost, high-quality products. However, their management styles and corporate philosophies differ slightly:

BlackRock (iShares): Known for its broad range of ETF products, BlackRock emphasizes innovation and has a strong focus on institutional investors. Their ETFs are widely used for building portfolios that target specific investment needs.
Vanguard: Known for its investor-focused philosophy, Vanguard is often praised for its low-cost structure and commitment to helping retail investors. Vanguard operates on a not-for-profit basis, which helps keep its fees low.

Both BlackRock and Vanguard are reputable and well-established firms, so choosing between them often comes down to personal preference.

3. Fees and Costs

Both XUU and VUN are known for their low-cost structures, making them attractive options for cost-conscious investors. However, there are small differences in their management expense ratios (MER):

XUU has a MER of approximately 0.07%.
VUN has a MER of around 0.16%.

While these fees are very low compared to actively managed funds, XUU has a slight advantage in terms of cost. Over time, lower fees can lead to better returns, particularly for long-term investors.

4. Holdings and Performance

While both ETFs provide similar exposure to the U.S. market, their holdings may differ slightly due to the different indexes they track. As a result, their performance can vary from year to year. However, over the long term, their performance tends to be very similar, as they both aim to capture the total return of the U.S. stock market.

5. Currency Exposure

Both XUU and VUN are unhedged ETFs, meaning they do not protect against fluctuations in the U.S. dollar and Canadian dollar exchange rate. This means that their returns could be influenced by currency movements. If the U.S. dollar strengthens relative to the Canadian dollar, these ETFs may benefit from higher returns for Canadian investors.

Conclusion

In summary, both XUU and VUN offer Canadian investors broad, low-cost exposure to the U.S. stock market. The key differences lie in the indexes they track, their management styles, and their fees. While XUU has a slight edge in terms of cost, VUN is backed by Vanguard’s strong reputation for retail investor support. Ultimately, the choice between the two will depend on personal preferences, such as which index you prefer and whether you have a preference for one fund manager over the other.

iShares Core S&P U.S. Total Market Index ETF (XUU.TO)

Objective: XUU seeks to track the S&P Total Market Index, offering broad exposure to U.S. stocks across all market capitalizations, including large, mid, small, and micro-cap stocks.

Composition: It includes a wide range of U.S. stocks, giving a comprehensive view of the U.S. equity market.

Expense Ratio: Typically has a low expense ratio, making it a cost-effective option for investors.

Diversification: Provides extensive diversification due to its broad market coverage.

Performance: The performance depends on the overall U.S. market performance, mirroring the S&P Total Market Index.

Vanguard U.S. Total Market Index ETF (VUN.TO)

Objective: VUN aims to track the CRSP US Total Market Index, which also offers broad exposure to the U.S. stock market, including large, mid, small, and micro-cap equities.

Composition: Similar to XUU, VUN encompasses a wide array of U.S. stocks, providing a comprehensive snapshot of the U.S. equity landscape.

Expense Ratio: MER: XUU has a lower MER at 0.08%, while VUN’s MER is 0.17%.

Diversification: Offers significant diversification across various sectors and company sizes in the U.S. market.

Performance: Its performance reflects the performance of the CRSP US Total Market Index, closely mirroring the broader U.S. market.

The TXF ETF, also known as the CI Tech Giants Covered Call ETF, is designed for investors who want exposure to large technology companies while generating income through a covered call strategy. In this post, we’ll explore how TXF works, its key features, and how it compares to similar ETFs like TEC.

What is TXF ETF?

The TXF ETF provides exposure to some of the world’s largest technology companies, including Apple, Microsoft, Alphabet, and Intel. It combines this tech exposure with a covered call strategy, where the fund sells call options on 25% of its holdings. This generates income from option premiums but limits the upside potential on that portion of the portfolio.

TXF primarily targets U.S.-based tech companies across multiple sub-sectors like software, hardware, semiconductors, and telecommunications. These companies are global leaders in areas like cloud computing, artificial intelligence, and hardware manufacturing.

Comparing TXF and TXF.B: Hedged vs. Unhedged Options

Here’s a table summarizing the differences between TXF and TXF.B:

Feature	TXF (CI Tech Giants Covered Call ETF)	TXF.B (CI Tech Giants Covered Call ETF – Unhedged)
Currency Hedging	Hedged to Canadian dollars (CAD)	Unhedged (exposed to U.S. dollar currency fluctuations)
Risk of Currency Exposure	Lower risk due to hedging	Higher risk due to exposure to USD/CAD exchange rates
Target Investor	Investors seeking stability from currency fluctuations	Investors wanting exposure to U.S. dollar movements
Objective	Provide steady returns with minimal currency impact	Provide returns with potential benefit/risk from U.S. dollar appreciation/depreciation
Ticker Symbol	TXF.TO	TXF.B.TO

Key Features of TXF ETF

· Focus on Tech Giants: TXF holds shares in large-cap tech leaders like Apple, Microsoft, Alphabet, Adobe, and Intel, providing exposure to one of the fastest-growing sectors.

· Covered Call Strategy: TXF writes at-the-money or slightly out-of-the-money calls on 25% of its holdings, balancing income generation with growth potential. This lower coverage ratio allows investors to still benefit from market rallies on 75% of the portfolio.

· High Dividend Yield: The ETF offers an attractive dividend yield of 8% to 10%, driven by:

Dividends from underlying stocks like Microsoft and Intel.
Premium income from selling options, which is higher in the volatile tech sector.

· Quarterly Distributions: Unlike many covered call ETFs that pay monthly, TXF offers quarterly distributions, aligning with corporate dividend schedules and paying out collected premiums.

· Management Fee: TXF charges a competitive 0.65% management fee, and the total Management Expense Ratio (MER) is 0.78%.

Performance and Risk

Source: Yahoo finance

TXF.TO (CI Tech Giants Covered Call ETF) has shown strong long-term performance, driven by its holdings in major tech companies like Apple, Microsoft, and Alphabet. These tech giants have delivered impressive growth over the years, fueling TXF’s solid returns, particularly over the 1-year (29.19%) and 5-year (16.33%) periods. The ETF employs a covered call strategy, generating additional income by selling call options on its holdings.

While TXF’s covered call strategy helps generate income even in fluctuating markets, it may underperform during strong market rallies due to the capped upside from the calls. However, TXF retains growth potential with 75% of the portfolio uncovered, allowing participation in tech sector growth.

Tax Efficiency

In non-registered accounts, the covered call income from TXF is tax-efficient. The premiums collected are typically treated as capital gains.

TXF vs TEC

Here’s a comparison between TXF and the TEC (TD Global Technology Leaders Index ETF):

Feature	TXF (CI Tech Giants Covered Call ETF)	TEC (TD Global Technology Leaders Index ETF)
Holdings Focus	U.S. tech giants (Apple, Microsoft, Alphabet)	Global tech (U.S., Europe, Asia)
Covered Call Strategy	Yes (income generation, limited upside)	No (full market upside potential)
Income Generation	Higher due to covered call premiums	Lower income focus, more growth-oriented
Growth Potential	Moderate due to income strategy	Higher growth potential with global tech exposure
Currency Hedging	Hedged (TXF) or unhedged (TXF.B)	Unhedged, exposed to foreign currency fluctuations
Target Market	Primarily U.S. tech giants	Broader global tech sector
Risk Level	Lower volatility due to income strategy	Higher risk from global exposure and growth focus

In summary, TXF uses a covered call strategy to generate steady income by selling options on U.S. tech giants, offering lower risk but limited upside during stock rallies. It’s ideal for income-focused investors who prefer more stability. In contrast, TEC is a growth-oriented ETF with full exposure to the global tech sector, offering higher upside but also greater risk due to market volatility. TEC suits investors seeking long-term growth without a focus on income.

Conclusion

The TXF ETF stands out as an ideal investment for those seeking exposure to high-growth tech companies while also generating significant income through a covered call strategy. Its lower coverage ratio allows for participation in tech stock rallies, making it attractive for growth-oriented investors who also want consistent, high-yield payouts. However, investors should be aware of the trade-offs, including potential underperformance in a rapidly rising market and the higher volatility associated with tech stocks.

As with any investment, ensure that TXF fits within your financial goals and risk tolerance

Investment objective

The Brompton Enhanced Multi-Asset Income ETF (BMAX) seeks to provide investors with a diversified, actively managed portfolio of income-generating securities, including Preferred shares (approx: 20%), Canadian equities, Canadian bonds, U.S. equities, and U.S. high yield bonds. This is an actively managed fund.

Strategy:

seeks to identify undervalued income-generating assets across multiple asset classes

using derivatives to enhance income and manage risk

focus on risk management and capital preservation

This ETF is for Investors who are…

Seeking stable enhanced monthly cash distributions

Conservative investors who desire a low volatility portfolio with some potentiel for capital approciation

Leverage

A leveraged ETF is a type of exchange-traded fund (ETF) that uses financial derivatives and debt to amplify the returns of an underlying index. While leveraged ETFs can potentially deliver higher returns than non-leveraged ETFs, they also come with increased risk. Due to the use of leverage, the value of a leveraged ETF can fluctuate more than the underlying index it tracks, and losses can be magnified as well as gains. BMAX uses 33% leverage ratio to enhance portfolio income & capital appreciation potential Medium risk-rating.

What’s a covered call ETF?

What’s unique about this ETF is that it uses covered calls to protect against downside risk. This being said, the covered call strategy provides limited downside protection. Also, when you write a covered call, you give up some of the stock’s potential gains. These ETFs will tend to have a higher yield and a lower performance.

Historical performance

ETF	Div Yld
BMAX	9.99%

Historical performance updated daily

Best US Dividend ETFs in Canada!

BMAX MER

ETF	MER* %
BMAX	Not yet published

BMAX Stock Profile

Updated daily

BMAX Stock 52 weeks high and low

Updated daily

BMAX ETF Holdings

% of Portfolio
Brompton Flaherty & Crumrine Investment Grade Preferred ETF	21.1%
Brompton Tech Leaders Income ETF	10.3%
Brompton European Dividend Growth ETF	10.2%
Brompton North American Low Volatility Dividend ETF	9.8%
Brompton Sustainable Real Assets Dividend ETFBrompton Sustainable Real Assets Dividend ETF	9.8%
Brompton North American Financials Dividend ETF	9.7%
Brompton Global Dividend Growth ETF	9.5%
Brompton Global Healthcare Income & Growth ETF	9.2%
Brompton Split Banc Corp Preferred Shares	2.6%
Life & Banc Split Corp Preferred Shares	2.4%
Global Dividend Growth Split Corp Preferred Shares	1.8%
Dividend Growth Split Corp Preferred Shares	1.7%
Cash and short-term investments	1.6%
Sustainable Power & Infrastructure Split Corp Preferred Shares	0.2%
Total	99.9%

Please check issuer’s website for up-to-date data

Introduction to Weekly Dividend ETFs

Weekly dividend ETFs are an intriguing option for investors looking to create a consistent cash flow. Unlike traditional dividend ETFs that typically pay out monthly or quarterly, these ETFs aim to provide income on a weekly basis. They achieve this through unique investment strategies that capitalize on market opportunities.

Two notable examples of weekly dividend ETFs are the Roundhill Innovation 100 ETF (QDTE) and the Roundhill S&P 500 ETF (XDTE). Both funds use innovative approaches to generate high yields, but they also come with their own set of risks and considerations.

Roundhill Innovation 100 ETF (QDTE)

The Roundhill Innovation 100 ETF (QDTE) is designed for investors seeking high-yield opportunities from the tech-heavy NASDAQ 100. Here’s how it works:

Investment Focus: QDTE invests in the largest companies in the NASDAQ 100, a collection of leading tech and innovation-driven firms.

Income Strategy: To generate weekly dividends, QDTE employs a covered call strategy. Specifically, it uses options that expire on the same day they are written, known as Zero Days to Expiration (0 DTE) options.

Risks and Rewards of the 0 DTE Strategy in Weekly Dividend ETFs

Aspect	Rewards	Risks
Income	High yield potential	Unpredictable, fluctuating income
Market Volatility	Benefits from market volatility	Increased price volatility, risk of capital loss
Complexity	Advanced strategy managed by the ETF	Difficult to understand for average investors
Costs	Generates income without active trading	High management fees reduce returns
Time Horizon	Good for short-term income generation	Not ideal for long-term, low-risk investors

Yield Potential: The potential yield for QDTE is quite high, sometimes reaching up to 62%. However, this yield is closely tied to market volatility—when the market is turbulent, yields can spike, but they can also drop when the market is calm.

Dividend Variability: Because QDTE’s income is based on market conditions, the dividends can vary significantly from week to week, making them less predictable.

Roundhill S&P 500 ETF (XDTE)

The Roundhill S&P 500 ETF (XDTE) takes a similar approach but focuses on a different set of underlying assets:

Investment Focus: XDTE invests in companies within the S&P 500, which includes a broad mix of large-cap U.S. companies across various industries.

Income Strategy: Like QDTE, XDTE uses a 0 DTE options strategy to generate income, writing covered calls that expire the same day.

Yield Potential: XDTE typically offers slightly lower yields compared to QDTE, reflecting the lower volatility of S&P 500 stocks. While the yield may not be as high, it can be somewhat more stable.

Dividend Stability: Dividends from XDTE are also subject to variability but tend to be a bit more consistent compared to QDTE, given the less volatile nature of the S&P 500 index.

Pros and Cons of QDTE and XDTE

Both QDTE and XDTE offer unique advantages and potential drawbacks:

Pros:

High Yield Potential: Both ETFs have the potential to deliver significantly higher yields than traditional dividend-paying ETFs or individual dividend stocks.

Weekly Cash Flow: The weekly dividend payments can provide a steady stream of income, which can be particularly useful for investors who need regular cash flow.

Cons:

High Expense Ratios: These ETFs come with higher-than-average management fees, typically around 0.95%, which can eat into your overall returns.

Dividend and Price Volatility: The dividends can vary significantly, and the prices of these ETFs can be more volatile due to their reliance on market conditions and the 0 DTE options strategy.

Conclusion: Is a Weekly Dividend ETF Right for You?

Investing in weekly dividend ETFs like QDTE and XDTE can be a compelling strategy for those looking for high yields and frequent income. However, it’s essential to understand the risks involved. The high yield potential is attractive, but the variability in dividends and the associated market risks may not suit every investor.

For those comfortable with the volatility and seeking simplicity in income generation, these ETFs might be an excellent fit. However, investors looking for more stable income might prefer traditional dividend-paying stocks or ETFs with more predictable payouts.

Ultimately, whether QDTE or XDTE is right for you depends on your investment goals, risk tolerance, and need for consistent cash flow. If you decide to invest, consider starting with a small allocation to see how these ETFs perform in your portfolio.

Investment objective

The ZWB ETF is designed to offer investors exposure to a selection of Canadian bank stocks that pay dividends. In addition to holding these dividend-paying securities, the ETF also generates income by writing covered call options. The stocks included in the portfolio are selected based on several key factors: Dividend growth rate, Dividend yield, Payout ratio and Liquidity.

What’s a covered call ETF?

This ETF stands out because it uses a covered call strategy to help protect against losses when stock prices drop. However, it’s important to note that this strategy offers only limited protection. Additionally, by writing covered calls, you may miss out on some of the stock’s potential gains if prices rise significantly. As a result, these ETFs typically offer a higher yield but may have lower overall performance.

ZWB is a great choice for conservative investors who want steady income, moderate risk, and exposure to Canadian banks. It’s also tax-efficient since all the dividends come from Canadian banks.

Please consult our recent post comparing ZWB with other popular High Dividend ETFs in Canada.

Historical performance

ETF	Div Yld
ZWB	6.79%

Historical performance updated daily

Best US Dividend ETFs in Canada!

ZWB MER

ETF	MER* %
ZWB – BMO Covered Call Canadian Banks	0.71

Top 10 Best Growth ETF in Canada!

XIC vs XIU: Best Canadian Index ETFs

ZWB Stock Profile

Updated daily

ZWB Stock 52 weeks high and low

Updated daily

ZWB vs HMAX ETF

The ZWB ETF from BMO employs a strategy where it sells out-of-the-money (OTM) call options on 50% of the stocks in its portfolio. This OTM strategy limits the potential gains of these positions to the option’s strike price until the option expires. For BMO ETFs like ZWB, these options typically expire within 1 to 2 months.

Compared to the HMAX ETF, which also uses a covered call strategy but with at-the-money (ATM) options, ZWB focuses exclusively on big Canadian banks and offers a dividend yield of 6-7%. HMAX, on the other hand, includes a broader mix of financial sectors such as banks, insurance, and asset management, and targets a higher yield of 13%. ZWB’s concentrated allocation to Canadian banks makes it a more focused option for investors seeking exposure to this sector with steady income.

ZWB Dividend history

Amount	Adj. Amount	Dividend Type	Frequency	Ex-Div Date	Record Date	Pay Date	Declare Date
0.1100	0.1100	Regular	Monthly	7/30/2024	7/30/2024	8/2/2024	7/23/2024
0.1100	0.1100	Regular	Monthly	6/27/2024	6/27/2024	7/3/2024	6/20/2024
0.1100	0.1100	Regular	Monthly	5/30/2024	5/30/2024	6/4/2024	5/23/2024
0.1100	0.1100	Regular	Monthly	4/26/2024	4/29/2024	5/2/2024	4/19/2024

ZWB ETF Holdings

Name	Weight
BMO Equal Weight Banks ETF	27.2%
Bank of Montreal	12.9%
Canadian Imperial Bank of Commerce	12.7%
Royal Bank of Canada	12.1%
National Bank of Canada	11.9%
The Toronto-Dominion Bank	11.9%
Bank of Nova Scotia	11.4%

Consult issuers’ website for up-to-date data

VCN stock: Investment objective

The Vanguard FTSE Canada All Cap Index ETF is on a mission to capture the essence of the Canadian equity landscape. Its goal? To mirror, as closely as possible and before accounting for fees and expenses, the performance of a comprehensive Canadian equity index. This index doesn’t discriminate – it encompasses large, mid, and small-cap publicly traded securities, painting a holistic picture of the Canadian market’s investment returns.

Diving into the specifics, this Vanguard ETF is currently dedicated to tracking the FTSE Canada All Cap Domestic Index, or its future iterations. How does it achieve this? By primarily investing in Canadian stocks spanning a broad spectrum of market capitalizations, ranging from the giants to the emerging contenders.

So, if you’re in search of an ETF that encapsulates the entirety of the Canadian equity landscape and boasts a diversified portfolio of companies, the Vanguard FTSE Canada All Cap Index ETF might be just the investment avenue you’ve been seeking.

Why invest in the Vanguard FTSE Canada All Cap Index ETF (VCN stock)?

Investing in the Vanguard FTSE Canada All Cap Index ETF can provide several compelling advantages for Canadian investors seeking broad exposure to their domestic economy. Here’s a tailored rundown of the benefits:

Diversification

The Vanguard FTSE Canada All Cap Index ETF encompasses a comprehensive array of Canadian companies across various sectors and market capitalizations. This diversification shields investors from the vulnerabilities associated with single-stock investment, helping mitigate risk.

Total Market Representation

By investing in this ETF, you’re effectively gaining ownership in a cross-section of the entire Canadian economy. This approach hedges against reliance on individual companies or sectors, ensuring you participate in the growth potential of both established large-cap firms and emerging, high-growth companies.

Cost-Effective Investing

Known for its low expense ratios, Vanguard ETFs are cost-efficient. This ETF’s lower fees translate to reduced overall costs, a crucial aspect for long-term investors concerned about fee erosion on their returns.

High Liquidity

As an ETF traded on stock exchanges, the Vanguard FTSE Canada All Cap Index ETF boasts high liquidity. This allows you to buy or sell shares with ease throughout the trading day, ensuring your investment remains flexible.

Long-Term Growth Potential

Investing in the Vanguard FTSE Canada All Cap Index ETF aligns you with Canada’s consistent economic growth over time. This strategy positions you to capture the nation’s overall economic expansion.

However, remember that investing in the Vanguard FTSE Canada All Cap Index ETF isn’t devoid of risks. The ETF’s performance is subject to market volatility and economic conditions.

VFV Review (2024): Vanguard S&P500 ETF For Canadians

Best Canadian Energy ETF – Top 5

Historical performance VCN

Top holdings – VCN

Holding Name	% Weight
Royal Bank of Canada	6.43%
Toronto-Dominion Bank	5.61%
Shopify Inc.	3.6%
Canadian Pacific Kansas City Ltd.	3.57%
Enbridge Inc.	3.48%
Canadian National Railway Co.	3.37%
Canadian Natural Resources Ltd.	3.09%
Bank of Montreal	3.09%
Bank of Nova Scotia	2.81%

Note: total number of stocks 176

Market capitalization

Captalization	VCN
Large	79.3%
Medium	18.5%
Small	2.2%
Total	100.%

VCN Stock – portfolio distribution by market capitalization

The table presents a breakdown of capitalization categories and their corresponding percentages within the VCN (presumably an entity or market). The categories are divided based on the size of the capitalized companies. Here’s a summary of the data:

Large: Companies with a significant market capitalization constitute the majority, accounting for 79.3% of the total. These are likely well-established, prominent corporations with substantial market value.

Medium: Medium-sized companies make up 18.5% of the total. These could be businesses that are smaller than the large ones but still have a noteworthy market presence.

Small: The smallest segment in terms of market capitalization, representing 2.2% of the total. These are likely companies that are relatively new, niche, or have limited market value.

Summary VCN

Aspect	VCN
Objective	Seeks to replicate FTSE Canada All Cap Domestic Index
Assets (AUM)	5.0B
Portfolio	Large, mid, and small-cap Canadian stocks
MER	0.05%
Duration	Designed as a long-term core holding
Diversification	Wide diversification across market capitalizations
Holdings	176

TEC ETF – Investment objective

The TD Global Technology Leaders Index ETF aims to mirror the performance of a global equity index that tracks mid- and large-cap tech companies worldwide. It seeks to replicate the Solactive Global Technology Leaders Index (CA NTR) or a potential successor. To achieve its goal, the fund managers plan to invest in a selected subset of securities from the relevant index. TEC fund manager may also explore other securities for exposure. Additionally, TEC can hold cash or equivalents to meet its obligations.

What’s the Solactive Global Technology Leaders Index (CA NTR)?

The Solactive Global Technology Leaders Index is comprised of traditional tech companies and others from different subsectors involved in disruptive technologies. Disruptive technologies are innovations or advancements that significantly alter or revolutionize traditional industries, business models, or products, often creating new markets or fundamentally changing existing ones. These technologies typically introduce novel approaches, efficiencies, and functionalities, causing a paradigm shift and challenging established norms within the industry.

This includes, but isn’t confined to, global companies in tech themes like Cybersecurity, IoT, E-Commerce, Robotics & Automation, AI, Autonomous Vehicles, and Cloud/Big Data. The Index, published in Canadian Dollars, comes in Price Return, Net Total Return, and Total Return variants.

Why you should consider adding Tech ETFs such as TEC to your portfolio?

Adding tech ETFs to your portfolio can be a savvy move for several reasons. Firstly, the technology sector has historically shown strong growth potential, making it a compelling choice for investors seeking capital appreciation. Tech companies often innovate and adapt quickly to market trends, potentially leading to higher returns.

Secondly, tech ETFs provide diversification by offering exposure to a broad range of technology-related companies. This diversification helps spread risk, reducing the impact of poor performance from a single stock or subsector on your overall portfolio.

Moreover, the tech industry is at the forefront of global innovation. Investing in tech ETFs allows you to participate in groundbreaking developments such as artificial intelligence, cybersecurity, and other transformative technologies that are shaping the future.

Additionally, tech ETFs are known for their liquidity and ease of trading on the stock market. This liquidity provides flexibility, allowing investors to buy or sell shares easily.

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Historical performance vs Similar ETFs

Historical performance – TEC ETF

Impressive numbers all around! TEC.TO has a robust year-to-date return at 34.54%, showcasing its strong performance in the short term. ZQQ.TO and XQQ.TO are neck and neck in year-to-date returns, both exceeding 33%, reflecting their consistent positive momentum.

In the longer term, over the past three years, TEC.TO and ZQQ.TO maintain closely competitive average returns at 8.35% and 8.34%, respectively. Meanwhile, XQQ.TO slightly outshines with an average return of 8.39%.

For the five-year average return, XIT.TO takes the lead with an impressive 16.80%, indicating strong performance and potential long-term growth. ZQQ.TO and XQQ.TO also exhibit healthy five-year averages, emphasizing their sustained positive trends.

MER – TEC ETF

The Management Expense Ratio (MER) for the TEC ETF stands at 0.39%. This ratio includes various costs associated with managing the fund, such as administrative expenses, advisory fees, and operational charges. A lower MER is generally favorable for investors, as it means a smaller portion of their investment is allocated to covering these expenses, leaving more potential returns. It’s essential for investors to consider the MER along with other factors when evaluating the overall cost and performance of the ETF.

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TEC ETF Portfolio of holdings

Top Ten Holdings

Apple Inc – Common	13.89%
Microsoft Corp – Common	12.63%
Amazon.com Inc – Common	6.23%
NVIDIA Corp – Common	5.62%
Alphabet Inc – Common Cl A	4.32%
Alphabet Inc – Common Cl C	3.74%
Tesla Inc – Common	3.71%
Meta Platforms Inc – Common Cl A	3.68%
Visa Inc – Common Cl A	2.06%
Broadcom Inc – Common	1.85%

In this post, we will discuss low volatility ETFs. This type of ETFs is popular with investors, especially during periods of strong stock market fluctuations. A low-volatility ETF is primarily a way to stay invested in the equity market while reducing your risk. These funds can generate growth despite their low volatility. ZLU and ZLB ETFs are among the most popular funds in this category:

ZLB Canadian Market Low Volatility Fund
ZLU Low Volatility Fund – US Market

For each fund, the investment objective and historical performance will be presented.

This article is available in Video format on our Youtube Channel!

Investment objective ZLU and ZLB ETF

The objective of the BMO Low Volatility Canadian Equity ETF (ZLB) is to provide exposure to a portfolio of low-beta Canadian equities. The portfolio only includes large cap stocks. The manager selects the stocks that are the least sensitive to the market. In total, ZLB invests in 47 Canadian stocks such as Hydro One, Metro Inc…etc.

ZLU has the same investment strategy as ZLB, but it invests in US securities. ZLU’s portfolio is made up of 100 of the least volatile stocks in the US market.

ZLU and ZLB are designed for investors concerned about market volatility. These investors want to stay invested in the stock market while reducing their market risk. ZLU and ZLB meet this need. These funds invest primarily in securities that are less volatile than the market. And, therefore, the resulting portfolios will have lower overall volatility than the market.

ZLU’s managers use Beta (over 5 years) as the main tool to assess market sensitivity of a stock.

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VUN: Vanguard US Total Market ETF

How the Beta is calculated?

The beta of a stock is the coefficient of sensitivity that indicates the relationship between fluctuations in the value of the security and fluctuations in the market. It’s the best measure of the systemic risk of a stock. In other words, how the broad market fluctuations impact the stock.

Beta is calculated by regressing the profitability of a stock on the profitability of the entire market. The market has a beta of 1.

Illustration

A stock ABC has a beta of 1.5. If the borad market fluctuates by +10% for example, ABC will tend to be 1.5 more volatile than the market and will go up on average +15%. The opposite is true if the market loses ground. So, if market goes down by -10%, ABC will on average slide -15%.

High Beta stocks can be found typically in market segments such as: energy, tech…etc. Low Beta stocks are usually in stable industries such as consumer staples, utilities, health care…etc.

Historical performance of ZLB ETF

We will compare ZLB with two similar ETFs:

XMV – Ishares Edge MSCI Min Vol Can ETF
FCCL – Fidelity Canadian Low Vol Index ETF

The ETFs above serve the same purpose as ZLB. However, the strategies used and the portfolios are different. For example, in the case of XMV from iShares, the fund manager does not use beta to select stocks, but rather the concept of “minimum volatility”. In other words, the manager ensures that the portfolio is low volatility and representative of the replicated index. Thus, the portfolio may contain volatile securities but the manager ensure that the covariance (the relationship between these securities) is low.

	AUM in M	MER %
ZLB -ZLU BMO Low Volatility CAD Equity	2,610	0.39
XMV -Ishares Edge MSCI Min Vol Can	155	0.33
FCCL – Fidelity Canadian Low Vol Index ETF	22	0.39

Source: TD Market and Research – MER Management expense ratio – AUM Assets under management

Updated daily

The ZLB fund has assets under management that exceed $2 billion. Without a doubt, it is the most popular low volatility fund in Canada. In terms of management expense ratio, XMV has the lowest MER at 0.33%. However, ZLB and FCCL are very close.

ZLB is the best fund in terms of long-term performance (5 years).

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ZLB vs XIU (Canadian index ETF)

The table below compares ZLB’s performance with an index ETF XIU (iShares S&P/TSX 60 Index ETF). I find the table illustrates the whole point of owning low volatility ETFs. We can see that ZLB performs better than an index ETF during market corrections. The fact that of ZLB portfolio is mainly comprised of low Beta stocks reduces greatly the risk and delivers a better performance.

Trailing returns % vs Benchmark

ZLB ETF Portfolio

Name	Weight
Hydro One Ltd	4,88 %
Fortis Inc	3,48 %
Franco-Nevada Corp	3,45 %
Emera Inc	3,42 %
Metro Inc	3,38 %
Intact Financial Corp	3,32 %
Loblaw Cos Ltd	3,20 %
Empire Co Ltd classe A	3,08 %
Canadian Utilities Ltd classe A	2,88 %
Fairfax Financial Holdings Ltd	2,67 %

ZLB ETF Sector allocation

Sector	Weight
Services financiers	21,78 %
Services aux consommateurs	19,95 %
Services publics	16,42 %
Télécommunications	10,84 %
Immobilier	10,48 %
Autres	20,53 %

Historical performance ZLU ETF

We will be comparing ZLU with two similar ETFs:

ULV-F Invesco S&P 500 Low Volatility Index
TULV TD Q U.S. Low Volatility ETF

The ETFs above have the same objective as ZLU. However, the strategies used and the holdings are different. For instance, in the case of Invesco’s ETF ULV-F, the fund manager does not use the Beta to select stocks but rather the concept the ‘lowest realized volatility over the past 12 months’.

	AUM in M	MER
ZLU -ZLU BMO Low Volatility US Equity	1,307	0.33
ULV-F Invesco S&P 500 Low Volatility Index	176	0.30
TULV TD Q U.S. Low Volatility ETF	50	0.34

Source: TD Market and Research

Updated daily

The historical performance seem to be in favour of BMO’s fund ZLU.

What are the holdings of ZLU ETF?

Weight (%)	Name
1.58%	CAMPBELL SOUP CO
1.55%	DOLLAR GENERAL CORP
1.52%	DOMINO’S PIZZA INC
1.51%	JOHNSON & JOHNSON
1.45%	MERCK & CO INC
1.40%	KELLOGG CO
1.39%	CBOE GLOBAL MARKETS INC
1.37%	PFIZER INC
1.36%	QUEST DIAGNOSTICS INC
1.36%	BECTON DICKINSON AND CO

ZLU ETF: Sector allocation

Since the fund’s primary selection criteria is low Beta, it’s no surprise the sector allocation is dominated by Utilities, Consumer Staples and Healthcare. However, overall, the fund is well diversified and offers both potentiel for growth and low volatility.

Full list of low volatility ETFs in Canada

SYMBOL	NAME
ZLB	BMO Low Volatility CAD Equity ETF
FCCL	Fidelity Canadian Low Vol Index ETF
XMV	Ishares Edge MSCI Min Vol Can ETF
MKC	Mackenzie Max Dvrs Cda Index ETF
XMM	Ishares Edge MSCI Min Vol Emerg ETF
XMW	Ishares Edge MSCI Min Vol Gbl ETF
MWD	Mackenzie Max Diversif World Dev ETF
VVO	Vanguard Global Min Vol ETF
XMI	Ishares Edge MSCI Min Vol EAFE ETF
ZLU	BMO Low Volatility US Equity ETF CAD
FCUL	Fidelity US Low Vol Index ETF
XMU	Ishares Edge MSCI Min Vol USA ETF