Did the markets in 2020 not go as well as you were hoping for? Trust me friend, you are not alone. With all that happened last year, this is understandable. But luckily for you 2021 is here and so am I.
In this blog I am going to help you figure out which Canadian Bank ETF is best for you.
CIBC vs TD BANK Vs Canadian Bank ETF
The XFN or the BlackRock Capital iShares S&P/TSX Capped Financials Index ETF is a strong ETF that clones the S&P/TSX Capped Financials Index. The result is a bundle of Canadian financial sector companies. These would give someone significant diversification in a specific sector, mixing banking, insurance and asset management. But there are many more, including HEF – Horizons Enhanced Income Financials or even for the more sophisticated the ZWB – BMO Covered Call Canadian Banks.
Income, Ease, Fees
The significant advantage of owning an ETF is the ease of buying from your online account and the low fees. The iShares S&P/TSX Capped Financials Index ETF has these fee structures.
Management Fee – 0.55%
Management Expense Ratio (MER) – 0.61%
These are reasonable fees considering some funds can cost you 5% commission. Dealing with an advisor means paying commissions, but this is more than reasonable as they are guiding if you are interested in a ‘plug and play’ approach. I must remember that just because I find the markets exciting and educational many people have little interest.
For many, just being in the market can mean a considerable advantage over those that do not. This is an excellent approach by robo investors or for individual who can just buy online. This is a perfect standard fire and forget strategy. It is the first step to participating in the market. But why not think of more than just the banking sector?
There are other ETF’s that can become interesting if you find that you have more interest or if you start to recognize different sectors, countries, or industries are more compelling than others.
These can have a place in a portfolio, but a financial sector ETF is the wrong move for me. I am focused on value and growth; on the shift, the reset the new ‘new’ that we have begun. If you are looking for an ETF, consider a precious metals ETF, but more on that later. This is why having an advisor is critical!
Please speak with your advisor about your goals. Mine are focused on energy, resources and the foundation for our electric future.
Before looking at the best Canadian bank ETF for 2021
The key consideration for a Canadian financial sector ETF would be you have firm conviction of the stability of the system and confidence not only in the dollar, but the banking system and economy of the country. Canada has always tended to be more conservative and reliable for investing and people look at the foundation of this system as being shock resistant. A lot of people would say well hey, can’t I just buy the top stocks these ETF’s hold in their bundle: say buy the top 3 stocks and have a strong bundle? You could but it may be cost prohibitive or you may be over allocated in the sector and also you will receive dividends quarterly. This is necessary to discuss with your planner.
There are some benefits to owning the ETF as it will pay monthly and for retirement you will find a stable monthly income a huge benefit then quarterly.
An ETF or ‘Stock Picker’
It is a stock pickers market. In fact, the Financial Post posted this article about those that invest in stocks compared to those that do not. The problem is that a lot of people are just not interested in investing. On top of interest is that it is complicated and there is a heavy educational basis required. That education is necessary now more then ever. There are so many resources available, for people to learn about specific markets. If you want to learn the system I use to pick stocks click here.
it is a stock pickers market but that does not mean people need to rush out and start picking individual companies! There is a lot of work that must be done and generally you will need to get good information from reliable sources. This has become more and more difficult as investment houses are heavily regulated and often restricted from encouraging it. Before even getting into the type of market we are entering one must consider if they are interested enough in investing. If you are not, then always pick an ETF or managed product. If you are a curious, critical thinker then join us and get involved in management teams and projects that will help create the future you want to see.
The best ETF of 2021
The best ETF or safest landing point will be a precious metals ETF. If you do not own physical gold or silver you need to consider at least an ETF. It may or not be backed by the metals but at least you will have a hedge against fiat currency risk. The trillions of dollars being printed almost require a Great Reset as the IMF has suggested. For me there are many ETF’s you can choose but I would much rather look at something a little more interesting. If you want the security of gold with the growth potential of cryptocurrency for example, have a look at this. If there is going to be a reset, I want to own a commodity or a critical element for the future rather then paper or a derivative.
The Market. The Model. The Mindset.
I have developed a system over the last 20 years as a financial professional which allows me to identify and select winners. I am happy to share it with you. Join me on my free weekly webinar where I talk about the markets and my system that I call The Market The Model and The Mindset.