J.C. HOOD INVESTMENT COUNSEL
INC. |
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