Thanks to Rob Carrick for this ETF idea. Well actually it was putting two Globe Investor pieces together. In this case, one plus one equals the CI Wisdom Tree Quality Dividend ETF – ticker DGRC. It combines the qualities that I personally look for in an equity ETF. Make that a meaningful dividend growth history and quality screens. It is the approach that I use for our US portfolio, even though we use a collection of individual stocks compared to an ETF.
Here’s the two pieces that combined to offer up that CI Wisdom Tree Quality Dividend ETF. Yes they are paywalled, but I’ll offer up the important deets. First off I did read Rob’s report on the Canadian Dividend ETFs. And then I found this post on why industrials might be more than well positioned for the economic recovery that is underway and will likely continue barring any vaccination or COVID ‘issues’.
On industrials, from that Globe post.
Spurred on by growing consumer confidence and strengthening economic data, including higher purchasing managers’ indexes, investors have had good reasons to begin rotating out of high-flying technology equities and long-term bonds, and into cyclical stocks over the past few months. One might also reasonably think, given this “great rotation,” that Canada’s industrial sector, which offers an eclectic mix of deep cyclical names, defensive yield stocks and higher-beta companies, would be enjoying a newfound favour among investors as well.
Industrials are late to the party.
But as of yet the industrials have not taken up the challenge. The sector might ‘be next’.
And now back to Rob Carrick’s dividend ETF post. One of the best performing dividend ETFs was that CI Wisdom Tree Quality Dividend ETF, and I remembered that it had a sizable allocation to industrials. That warranted a deeper look at the ETF.
The 3-year returns were only second best to the Vanguard High Dividend Yield ETF that I use in my wife’s spousal RRSP account.
Covering the moat and wide moat sectors.
The CI Wisdom Tree Quality Dividend ETF appears to mirror the moat stock selection approach. That should not be of any surprise given the quality screens and insistence of a dividend growth history.
I am still a big fan of Horizons Dividend ETF, HAL that will also share some of those attributes. That fund uses artificial intelligence to screen for quality and dividend sustainability. It is a total return focused fund.
Here’s the recent sector allocation for the CI Wisdom Tree Quality Dividend ETF.
I have been searching for an ETF that might best capture or mirror my personal Canadian stock portfolio approach – those moat and oligopoly stocks. I am not a big fan of competition when it comes to holding individual stocks 🙂
The BMO Low Volatility ETF captures a lot of the market-beating and less risk “stuff” but it manages to do so in its own way. But at its core, the priority is quality and less volatility (risk). That is a wonderful approach and ETF.
From railways to grocers and more.
The CI fund will cover off the moat sectors. To my eye that includes, banks/insurance, railways, grocers, telcos, pipelines/utilities. Moats dominate, but to round things out you’ll also find many of the most durable and successful Canadian businesses. Thomson Reuters, Magna International, Alimentation Couche-Tarde, Waste Connections, Intertape Polymer Group, Stella Jones. You’ll find a few of those names in The Dividend Guy portfolio as well. Those companies are moat-like I might suggest.
I’m not surprised to find some of the Canadian tech companies that also make their way into Horizon’s HAL. That is some meaningful confirmation.
I have been a very passive investor these last several years (I have not sold out of any stock position) I continue to shade in certain assets such as bitcoin and others. I don’t reconstruct, I fix portfolio holes.
That said, it is on my mind to shore up my concentration risk for my Canadian stock holdings. Perhaps some of my wife’s VDY profits and dividend proceeds should find a new home? From the time of investment I found the top Dividend ETF for my wife’s account.
Success is opportunity.
I will certainly add the ETF to my update posts.
Here’s The Canadian Dividend ETFs in 2020.
The Weekend Reads.
I think I forgot to share the MoneySense Best ETFs for 2021. I’m more than happy to be back as a panelist.
Enoch at Savvy New Canadians has a look at the bitcoin ETFs in Canada.
On GenYMoney, The education of a value investor. That style never goes out of style, perhaps.
Guy Spier is an investor based out of Zurich and he runs the Aquamarine Fund. He emulates his investments based on Warren Buffett style investing, focusing on using no debt, and focusing on businesses that have good management and good cash flow.
On Findependence Hub we meet the enemy of the investor, and it is you and me. There are many good posts on the Hub, every week.
Another great post in The Sunday Investor Newsletter, covering the ESG space and the usual weekly stock and sector overviews.
What if there was no miracle vaccine?
A provocative post on why evaluating investment success over the last year is pure hindsight. We can give thanks to a miracle. A welcome miracle.
Jason Heath offers a must-read on The Financial Post, Canadian inheritances could hit $1 trillion over the next decade and both bequeathers and beneficiaries need to be ready.
The rising rate environment presents challenges and risks for mortgage holders. Lowestrates.ca offers … With fixed rates on the rise, is a variable-rate mortgage now your best bet?
Here’s the March update from Rob on Passive Canadian Income.
Covering more weekend read ideas head on over to My Own Advisor.
Here’s the Sunday Ride at Banker on Wheels.
And last but not least my MoneySense weekly. Will we see the rise and fall of the retail investor? They are getting bored. Perhaps they’ll head back to the casinos.
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We’ll see you in the comment section. What are your thoughts on the The CI Wisdom Tree Quality Dividend ETF?
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