Do you own VDY? What's you're opinion on it? What fund do you want me to look over next? And remember, join the No-BS Newsletter! www.stocktrades.ca/find-more-canadian-etfs-stocks-and-opinions/
I don’t but imo if someone wants dividends this is a great one ticket solution. The name high dividend fund is misleading as the top 10 holdings are not the top yielding stocks, however it’s marketing.
Great insight. Thanks! The dillema especially of those near or already in retirement is where to get their monthly source of income. If unlike you who really know how to pick stocks, what would be the next best thing to choose a tsx-based etf for income?
Keep in mind I'm not necessarily saying income ETFs are all that bad but I think a yield prioritized one is a bit off! But that's just me. Do your thing!
@@StocktradesLtd At the end of the day a total return always wins, and if you need income you can sell some shares instead of chasing high yield funds, but it’s just me.
I wouldn’t mind seeing a fixed income ETF reviewed. I really don’t understand bonds and GIC’s. Stocks I understand - buy low, sell high. Bonds have maturity dates to them, do I have to hold it that long? The interest you earn, is that for each year or over the entire term total?
The MER difference with SPY is real, but when you add potential currency risks, forex fees, and tax implications, the gap narrows. If you’re building a Canada-focused portfolio and want strong dividend income, VDY might still be a better fit despite the higher MER. If you're okay with the added complexity and prefer U.S. market exposure, SPY could be worth the trade-offs.
I'm curious about one thing: you keep hammering the point "high dividend, high dividend, focus on yield". But if you look at the top holdings of this fund it has relatively modest dividend payers (modest at least by the Canadian dividend landscape standards). RY is very heavy in this fund and pays a solid but hardly super-high 4%. CNQ is currently paying under 4% but I guess that's because the price rose so much recently. TD is currently elevated at around 5% but normally pays closer to 4%. If they only really focused on yield they'd probably hold a lot more in pipelines, BNS instead of RY/TD, more GWO than MFC, more EMA than FTS, etc. So it looks like they do factor in something other than just yield. Some kind of quality or growth factor I'd guess. As for why people focus somewhat on yields instead of total returns I suspect you really do know the answer: they want a flow of money without having to sell any shares. Investing in dividends is more of a behavioral/emotional choice than a logical/optimal one. I will say this about dividends investing though: because it helps people emotionally and behaviourally it may actually be quite good for people who might otherwise be prone to panic selling low and FOMO buying high (which is most people). Dividend investors prefer to buy low (instead of selling low) and not buy high because they look at yields, and yields are inverse to prices. So that can often work out well by accident. They buy low, don't buy high, and hold long term. That's a really good behavioural recipe for investing success even if their allocation/portfolio is not optimal. Like you I'd still recommend low-fee, diversified index funds for everyone, but you could do a lot, lot worse than being a dividend investor. As for fees: Canadian ETFs tend to have a fair bit higher fees than US ETFs. You'll find the same thing with a lot of ETFs in other countries. The US market simply has so much money and so much competition that they have to keep fees low but can still make a decent amount of money despite this. Anyway, as far as Canadian ETFs go I think 0.22% is actually pretty reasonable. The all-in-one index funds like VEQT and XEQT are around the same amount. A lot of ETFs offered by the banks are more like 0.3-0.6%. It's usually only very simple ETFs like the FTSE Canada All Cap (VCN) or a big Canadian bond fund (like VAB) where you'll get much lower fees, but then you also need to do more work adding other funds and trying to keep them all balanced. People will pay a bit more for convenience and to get around behavioural issues (like not wanting to sell some of your winners to buy more of your losers in order to rebalance). Anyway your videos to look into these ETFs are pretty informative and helpful. Keep up the good work.
The index's goal that VDY tracks is, word for word: "comprises stocks that are characterized by higher than-average dividend yields." That is mostly where I was going with that. In terms of fees, plenty of funds offer much lower fees here in Canada. Look at a lot of BMO's funds. Even something like ZSP is 0.09%.
Yield is not an indicator of performance. It's a common mistake when you first start, and one reason is that dividend yield is easy to understand. Luckily, I understood this quickly and didn't lose money (beside some potential return), but some people don't want to put more time in learning ang latch unto yield to their detriment.
Why invest based on yield? For a passive income that you don't need to sell assets to earn. Sure, picking the highest yields is probably not the best way to go, but there are high dividend stocks that are reliable, like the banks, REITS and more.
Thank you for this video. I had already been thinking of divesting myself of an "Equity Income" mutual fund that had been underwhelming me, but now I am convinced (I invested in it several years before I discovered Stocktrades and ETF's). I would like to see your take on Labour Sponsored Funds (LSIF) from the investor's point of view. I have been putting the max ($5000) in for the last 3 years to the FTQ Solidarity Fund and use the $1500 tax refund to buy solid performing ETF's. In my mind the ETF's return added to the FTQ return adds up to an overall strong return.
HI Dan. I don't own this ETF and as an older new investor who's still in the very early stages of learning, I'm in agreement with you about going after the high yields; it's not a good strategy. I'm a fairly new member of Stocktrades and am wondering if the premium newsletter is the same as the no bs newsletter? Do I need to sign up? Thank you for all of your insight and experience. It is much appreciated!!
Hey there! The No-BS newsletter is a free newsletter. Our Premium platform is an entirely different thing. A full platform with research, screeners, model portfolios etc. If you're interested in that, send me an email at dkent(at)stocktrades(dot)ca and I can get you some more information!
@@StocktradesLtd I'm already a Stocktrades member and love it! I didn't know though about the NO-BS newsletter. I'll sign up for the NO-BS newsletter as well. Thank you!!
Thanks Dan, VRIF looks to be a very interesting way to go for part of or as a core holding in a retirement portfolio. But it does not get much attention or hype really hope that VRIF garners your attention.
Hi Dan. New to the party. Greatly appreciate your frankness, and wealth of knowledge. Do not own the VDY ETF. I initially got into investing because I was intrigued by Gold. Now there's all sorts of movement. What's your perspective on the ways to invest, and what to consider, with Gold. Thanks for returning to TH-cam. Enjoying the content.
You gotta ask yourself, why were you intrigued by gold? Because you're coming at a time when gold has never been worth more in history (ATH). I'm no expert, but I do have a small gold allocation (via an ETF CGL.C). Since the time of Jesus, gold has returned 0% after inflation (so a good reserve of value, keeping up with inflation, but no return). That data is useless for our lifetime, and looking at a chart price of gold you'll see that it's very volatile, so it's a risky asset in a sense. It's not correlated to much beside geopolitic, and that is the main reason why people hold it I believe. In times of crisis, when almost everything goes down, gold usually goes up. Other than that, gold is a speculative asset and a commodity. Bitcoin is called digital gold because it shares a lot of the same characteristics.
I own VDY for about 4 years now, it is like riding a limping camel. It knows where it’s going but super slow in an uneven path. I am thinking about selling all my shares and move to something go back to SP500. Canadian stocks in general suck.
In defense of VDY, the sector exposure and most holdings are junk, but you have to compare it to MMF & GIC's. You might be getting 5% risk free with fixed income, but not for long. You are better off locking in a 4.5i% yield in VDY. At a conservative 3.5% annual dividend increase, the yield will double to 9% on cost basis in 20 years and barring a catastrophic event, you will double also double your money in 20 years with an extremely conservative 3.5% annual capital appreciation. Not bad for someone looking for income with a currency risk. But if you are young, hey, go with the S&Ok 500 index fund and keep it for 30, 40 years or forever. Too bad "family mentors" strongly discouraged stock market investments for years and years. Yea, it was intimidating, but TH-cam opened our eyes.
@@StocktradesLtd I feel bad answering because you know that time in the market is your friend. You will at least break even after 20 years even when buying at an all time high. I'll bet you 10K CAD that even the TSX junk 60 will be higher on June 8th 2044.
@@yannik9341 You just said that over a long horizon you're better off owning the S&P 500. Which led me to believe you're stating VDY is more for a shorter horizon, which brings with it much more risk in terms of equity versus fixed income.
Just wondering, if you're not a fan of etfs, why do videos on them for your updated youtube channel? Why not focus on individual stocks or similar content that you do for the Can. Investors pod cast? You have a lot of knowledge in the industry, seems strange to just do videos on something you're not into.
Do you own VDY? What's you're opinion on it? What fund do you want me to look over next? And remember, join the No-BS Newsletter! www.stocktrades.ca/find-more-canadian-etfs-stocks-and-opinions/
no I don't have this stock can you review XIC ETFS supplement my investments my main investments are individual stocks they are what I focus on
I don’t but imo if someone wants dividends this is a great one ticket solution. The name high dividend fund is misleading as the top 10 holdings are not the top yielding stocks, however it’s marketing.
Thanks for this detailed review!
No problem!
Great insight. Thanks!
The dillema especially of those near or already in retirement is where to get their monthly source of income. If unlike you who really know how to pick stocks, what would be the next best thing to choose a tsx-based etf for income?
Keep in mind I'm not necessarily saying income ETFs are all that bad but I think a yield prioritized one is a bit off! But that's just me. Do your thing!
@@StocktradesLtd At the end of the day a total return always wins, and if you need income you can sell some shares instead of chasing high yield funds, but it’s just me.
Thanks you for helping me realize how exposed my portfolio is. 👍
🤘
Dan is an excellent guide to learning !
Very detailed and eye opening analysis. Good work, thank you!
My pleasure!
Hi Dan. Could you assess Smart Centre REIT dropping like a stone. Thanks for the great content.
REITs are struggling right now due to the rate environment and real estate property pressures. I'll have a look at smart center
are there other etfs for dividend / a monthly income or would it be better to just stick with an etf and sell the capital gains when drawing down
Everyone's situation is a bit different! Again, I'm not here to tell people how to invest. Just providing an objective opinion
Great video. Which dividend ETFs do you recommend. Please share?
I don't like too many Canadian specific ones! But I'll have a peek at some I may have missed.
I wouldn’t mind seeing a fixed income ETF reviewed. I really don’t understand bonds and GIC’s. Stocks I understand - buy low, sell high. Bonds have maturity dates to them, do I have to hold it that long? The interest you earn, is that for each year or over the entire term total?
Very good ideas
The MER difference with SPY is real, but when you add potential currency risks, forex fees, and tax implications, the gap narrows. If you’re building a Canada-focused portfolio and want strong dividend income, VDY might still be a better fit despite the higher MER. If you're okay with the added complexity and prefer U.S. market exposure, SPY could be worth the trade-offs.
I'm curious about one thing: you keep hammering the point "high dividend, high dividend, focus on yield". But if you look at the top holdings of this fund it has relatively modest dividend payers (modest at least by the Canadian dividend landscape standards). RY is very heavy in this fund and pays a solid but hardly super-high 4%. CNQ is currently paying under 4% but I guess that's because the price rose so much recently. TD is currently elevated at around 5% but normally pays closer to 4%. If they only really focused on yield they'd probably hold a lot more in pipelines, BNS instead of RY/TD, more GWO than MFC, more EMA than FTS, etc. So it looks like they do factor in something other than just yield. Some kind of quality or growth factor I'd guess.
As for why people focus somewhat on yields instead of total returns I suspect you really do know the answer: they want a flow of money without having to sell any shares. Investing in dividends is more of a behavioral/emotional choice than a logical/optimal one. I will say this about dividends investing though: because it helps people emotionally and behaviourally it may actually be quite good for people who might otherwise be prone to panic selling low and FOMO buying high (which is most people). Dividend investors prefer to buy low (instead of selling low) and not buy high because they look at yields, and yields are inverse to prices. So that can often work out well by accident. They buy low, don't buy high, and hold long term. That's a really good behavioural recipe for investing success even if their allocation/portfolio is not optimal. Like you I'd still recommend low-fee, diversified index funds for everyone, but you could do a lot, lot worse than being a dividend investor.
As for fees: Canadian ETFs tend to have a fair bit higher fees than US ETFs. You'll find the same thing with a lot of ETFs in other countries. The US market simply has so much money and so much competition that they have to keep fees low but can still make a decent amount of money despite this. Anyway, as far as Canadian ETFs go I think 0.22% is actually pretty reasonable. The all-in-one index funds like VEQT and XEQT are around the same amount. A lot of ETFs offered by the banks are more like 0.3-0.6%. It's usually only very simple ETFs like the FTSE Canada All Cap (VCN) or a big Canadian bond fund (like VAB) where you'll get much lower fees, but then you also need to do more work adding other funds and trying to keep them all balanced. People will pay a bit more for convenience and to get around behavioural issues (like not wanting to sell some of your winners to buy more of your losers in order to rebalance).
Anyway your videos to look into these ETFs are pretty informative and helpful. Keep up the good work.
The index's goal that VDY tracks is, word for word:
"comprises stocks that are characterized by higher than-average dividend yields."
That is mostly where I was going with that. In terms of fees, plenty of funds offer much lower fees here in Canada. Look at a lot of BMO's funds. Even something like ZSP is 0.09%.
@@StocktradesLtd love zsp
Excellent analysis regarding the overnight funds rate and performance. Thank you.
My pleasure!
Great video.
Would it be possible to do one about International ETF for Canadians.
For sure!
Yield is not an indicator of performance. It's a common mistake when you first start, and one reason is that dividend yield is easy to understand. Luckily, I understood this quickly and didn't lose money (beside some potential return), but some people don't want to put more time in learning ang latch unto yield to their detriment.
Why invest based on yield? For a passive income that you don't need to sell assets to earn. Sure, picking the highest yields is probably not the best way to go, but there are high dividend stocks that are reliable, like the banks, REITS and more.
Thank you for this video. I had already been thinking of divesting myself of an "Equity Income" mutual fund that had been underwhelming me, but now I am convinced (I invested in it several years before I discovered Stocktrades and ETF's).
I would like to see your take on Labour Sponsored Funds (LSIF) from the investor's point of view. I have been putting the max ($5000) in for the last 3 years to the FTQ Solidarity Fund and use the $1500 tax refund to buy solid performing ETF's. In my mind the ETF's return added to the FTQ return adds up to an overall strong return.
That would be an interesting video for sure!
HI Dan. I don't own this ETF and as an older new investor who's still in the very early stages of learning, I'm in agreement with you about going after the high yields; it's not a good strategy. I'm a fairly new member of Stocktrades and am wondering if the premium newsletter is the same as the no bs newsletter? Do I need to sign up? Thank you for all of your insight and experience. It is much appreciated!!
Hey there! The No-BS newsletter is a free newsletter. Our Premium platform is an entirely different thing. A full platform with research, screeners, model portfolios etc. If you're interested in that, send me an email at dkent(at)stocktrades(dot)ca and I can get you some more information!
@@StocktradesLtd I'm already a Stocktrades member and love it! I didn't know though about the NO-BS newsletter. I'll sign up for the NO-BS newsletter as well. Thank you!!
My Canadian exposure is HXT.
Nice!
While I may own the polar opposite ETF from Vanguard, which is VRIF. Would really like a review/deep dive by you into VRIF ETF.
Interesting. I'll have a look!
Thanks Dan, VRIF looks to be a very interesting way to go for part of or as a core holding in a retirement portfolio. But it does not get much attention or hype really hope that VRIF garners your attention.
Hi Dan. New to the party. Greatly appreciate your frankness, and wealth of knowledge. Do not own the VDY ETF. I initially got into investing because I was intrigued by Gold. Now there's all sorts of movement. What's your perspective on the ways to invest, and what to consider, with Gold. Thanks for returning to TH-cam. Enjoying the content.
Costco gold bars are pretty nice 😁
You gotta ask yourself, why were you intrigued by gold? Because you're coming at a time when gold has never been worth more in history (ATH). I'm no expert, but I do have a small gold allocation (via an ETF CGL.C). Since the time of Jesus, gold has returned 0% after inflation (so a good reserve of value, keeping up with inflation, but no return). That data is useless for our lifetime, and looking at a chart price of gold you'll see that it's very volatile, so it's a risky asset in a sense. It's not correlated to much beside geopolitic, and that is the main reason why people hold it I believe. In times of crisis, when almost everything goes down, gold usually goes up. Other than that, gold is a speculative asset and a commodity. Bitcoin is called digital gold because it shares a lot of the same characteristics.
I own VDY for about 4 years now, it is like riding a limping camel. It knows where it’s going but super slow in an uneven path.
I am thinking about selling all my shares and move to something go back to SP500. Canadian stocks in general suck.
It's definitely struggled but you never know when the Canadian markets may have their day
excellent content
Glad you think so!
Well you also forgot there is div credit on taxes.
In defense of VDY, the sector exposure and most holdings are junk, but you have to compare it to MMF & GIC's. You might be getting 5% risk free with fixed income, but not for long. You are better off locking in a 4.5i% yield in VDY. At a conservative 3.5% annual dividend increase, the yield will double to 9% on cost basis in 20 years and barring a catastrophic event, you will double also double your money in 20 years with an extremely conservative 3.5% annual capital appreciation. Not bad for someone looking for income with a currency risk. But if you are young, hey, go with the S&Ok 500 index fund and keep it for 30, 40 years or forever. Too bad "family mentors" strongly discouraged stock market investments for years and years. Yea, it was intimidating, but TH-cam opened our eyes.
Not sure how you can compare risk free investments like GICs and MMFs to a 100% equity ETF. They are not even remotely close to the same.
@@StocktradesLtd I feel bad answering because you know that time in the market is your friend. You will at least break even after 20 years even when buying at an all time high. I'll bet you 10K CAD that even the TSX junk 60 will be higher on June 8th 2044.
@@yannik9341 You just said that over a long horizon you're better off owning the S&P 500. Which led me to believe you're stating VDY is more for a shorter horizon, which brings with it much more risk in terms of equity versus fixed income.
Just wondering, if you're not a fan of etfs, why do videos on them for your updated youtube channel? Why not focus on individual stocks or similar content that you do for the Can. Investors pod cast? You have a lot of knowledge in the industry, seems strange to just do videos on something you're not into.
When did I say I wasn't a fan of ETFs? Just not this one in particular
@@StocktradesLtd my mistake. Still, non etf videos would also be welcomed.
I appreciate all content Dan!!
Thanks
Welcome
So which Dividend fund are you a fan of?
Canadian ones? It will be hard to find a strong performer.
Great review. I will definitely avoid this etf
Glad you like it!