J.C. HOOD INVESTMENT COUNSEL INC.

 

 

Monthly Newsletter-March 2014

 

Hello Everyone:

 

Housekeeping:  Tax receipts were emailed 2 weeks ago so if you have not received yours yet, please let me know.

 

Income statements have started to be mailed out by NBCN; as I mentioned in our February newsletter, ETF providers are always late to report as they have to wait until all dividends are paid by constituent stocks.

 

ETF Price Wars:  iShares just dropped their fees on several of their ETFs including XIC, the broadly-based TSX composite which we already hold in many accounts.  Fees are being chopped from 25bps to just 5bps, an 80% reduction.

 

Similarly XEI/Equity Income which we do not hold, as I thought it was too pricey, has been cut from 55bps to just 20bps so we will be adding this to our income/dividend focused portfolios.  It currently yields about 4.4%

 

The S&P 500 ETF XSP, hedged against the $US, has been reduced from 25 bps to 15 in line with competitively-priced ETFs from Vanguard.  XSP has been a core holding of the firm for many years as we wanted a hedge against a decline in $US.  When we believed that the $CDN would weaken, we bought the V V from Vanguard in $US to take advantage of potential currency gains which has also worked out well.

 

Markets:  I still have concerns about Putin’s ambitions in the Ukraine and other former Soviet era territories, e.g. Moldava and Georgia.  As I mentioned on BNN last week, I want to see how ‘the Great Game’ will reveal itself and its impact in Europe so I am remaining cautious on buying the new ETF, EUR from First Trust.  For our new clients, I continue to remain ‘underweight’ equities by about 10%.

 

If you have any questions, please don’t hesitate to call.

 

THANK YOU FOR YOUR BUSINESS

 

John

 

Member of the PORTFOLIO MANAGERS ASSOCIATION OF CANADA

And the CFA Institute

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John Hood, B.A., M.A., FCSI
Pres. & Portfolio Manager
J.C. HOOD INVESTMENT COUNSEL INC.
505 Bella Vista Drive,
Pickering, Ontario L1W 2A7
Tel:  905-492-4444
Fax: 905-492-4444
http://www.jchood.com
email: jchood@rogers.com
Member of the Portfolio Management Association of Canada