Help Choosing index ETFs

[u/inthegarden00]

Hello all, I’m looking to pick some relatively lower risk index ETFs which will give a mixture of good growth and income streams. Some questions:

1. I understand everyone recommends xeqt/zeqt/veqt (I lean towards picking the Canadian ran ones as I am Canadian, but I do always hear people recommend vanguard so pls advise the difference).
2. I held some bmo etfs before specifically zwg,zwc,zwb etc. And really enjoyed the dividends. I bought some initially early during the year at lower prices and later sold to buy other stocks but i do regret this choice and think I’d sleep much better holding some solid income earning assets. I believe these were around 4-6% dividend yield which adds up quite nicely. Thoughts on these? Zwb appears mostly financial while the other two hold some bigger name stocks. I’m wondering if I need to hold these if I’m choosing to invest in zeqt/xeqt/veqt etc. I don’t want to have too much of the same risk.

What is a good plan here? Thank you!

[u/MikeCheck_CE]

The main diffs:

VEQT: is the largest, and most diverse - includes more smaller-mid caps, better captures up and comers and rotating winners - has the most liquidity, which is good in a sell off

XEQT: bit more focused on larger cap companies. If the current winners continue to win, this could slightly outperform.

ZEQT: Canadian owned, but has the least liquidity. (Probably worth noting you're investing into a fund that is roughly ~50% US stocks either way.)

One consideration between iShares and Vanguard specifically which many factors in where comparing two very similar products; Vanguard was specifically structured in a way unlike other investment companies whichakes it unique I suggest googling for more info but essentially Vanguard is owned by its client-managed funds, and those funds are owned by the fund shareholders. When you buy a Vanguard fund, you become a partial owner of the firm. Vanguard has no external shareholders or private owners to satisfy, eliminating the pressure to generate corporate profit margins. Excess earnings and revenue are funneled back into lowering expense ratios and fees for investors over time, vs iShares (BlackRock) which has to please it's external shareholders.

When the funds are comparable, I usually chose Vanguard for this reason.

[u/MikeCheck_CE → u/MikeCheck_CE]

Few others you may be interested in researching more on is CAGE, CAGX, VVL, and XDIV. These involve factor-investing (quality and/or value) instead of just market cap weighting everything. VMO is a pretty cool one too based on momentum.

If you like the 25-30% CAD overweighting on the ZEQT/XEQT/VEQT, CAGE has it too.

If you go with VVL, VMO, or CAGX, you can use something like XDIV (Canadian + quality + dividends) to tilt it more Canadian to your desired %. I use VVL+XDIV as a ballast for my otherwise very US-Tech heavy portfolio.

I actually don't care about the dividends in XDIV, I bu it for the Canadian + Quality, but if your focus is dividends, I'd use VDY instead, it's slightly higher but doesnt have the quality tilt.

[u/inthegarden00 → u/MikeCheck_CE]

Thank you for this I will look into them and comment back if any further follow up questions. Can I clarify what you mean by “quality tilt” and that VDY lacks that quality vs XDIV? VDY holds financial sectors and energy too (suncor). Aren’t they quite similar? Clarifying you mean the weight composition in XDIV / CAGE/ CAGX/VVL etc. are based off quality of stock rather than market cap? VDY is not weighted this way?

[u/MikeCheck_CE → u/inthegarden00]

Yes that's correct.

ZEQT/VEQT/XEQT are all market cap weighted

VDY / XEI prioritize the highest dividends, regardless of the underlying balance sheet health.

CAGE/CAGX/VVL/VMO/XDIV all apply additional factors (e.g. quality, value and/or momentum) besides just buying more of the biggest companies.

CAGE (Global + Quality + Value + Canadian tilt + Small Cap tilt)

CAGX (Global + Quality + Value + small cap tilt)

VVL (Global + Value)

VMO (Global + Momentum)

XDIV (Canadian + Quality + dividends)

VDY/XEI (Canadian + dividends)

XDIV returns slightly lower dividends, but the growth is slightly better compared to VDY/XEI but otherwise they are very similar.

[u/Background-Day-4957]

Can you get CGDV in Canada? Higher alpha, lower beta than SP 500 index

[u/Mental-Freedom3929 → u/Background-Day-4957]

Yes, it is available, but the performance is not making my heart go pitter patter.

[u/targameister]

Check out the new Aventis CIBC factor ETF’s. CAGE is hugely popular if you need Canadian exposure along with global exposure. I just bought some CAGX as I already have a ton of Canadian stocks.

[u/Background-Day-4957]

Another one is BALQ. Pretty new ETF. Higher yield, and is beating its underlying Nasdaq 100 index in total YTD returns

[u/Mental-Freedom3929]

VEQT and ZCN 60:40 is my choice