In the exchange traded fund (ETF) space, I typically focus on two key sub-sectors: index ETFs, and dividend-focused ETFs, for various reasons.
I like index ETFs for the specific reason that I don’t believe most people (99% of the population) can beat the S&P 500 over a 30-year period. The fees on index funds are also typically the lowest, as they’re the easiest to manage.
I like dividend ETFs mainly for the higher yields these funds offer relative to index funds, albeit with lower total return typically, over longer periods of time.
There are typically slightly higher fees paid for non-index ETFs, and higher fees still for actively managed ETFs like the one I’m about to suggest. However, I like the quality of this fund’s holdings, and view this actively managed option as a great hybrid option for investors looking for lower fees than a mutual fund, but some of the same attention as said funds.
The Horizons Active Canadian Dividend ETF (TSX:HAL) is one of the best performing dividend ETFs in Canada over the past year, in part due to the strategy underpinning this ETF and the quality of the stocks held in this fund.
This ETF does a great job of both picking excellent high-quality Canadian dividend names, but also managing risk, providing ETF holders with a very impressive risk-adjusted return of late.
While past performance in no way indicates future performance, I do admit this is an interesting ETF option from my perspective as far as actively managed ETFs go, because typically I don’t even look at these (due mainly to higher fees- what you’re trying to avoid in the first place by investing in an ETF).
Invest wisely, my friends.
