tag:blogger.com,1999:blog-5465015914589377788.post5153359275767757038..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: XIU is Hard to Replicate CheaplyMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-5465015914589377788.post-60982514358014007652014-03-17T09:50:30.832-04:002014-03-17T09:50:30.832-04:00@Jon Evan: I wish these people the best of luck. ...@Jon Evan: I wish these people the best of luck. I'm sure that most don't understand the risks they are taking. Your emotional characterization of XIU returns is nonsense. It is far easier to do your taxes owning just XIU instead of owning a pile of stocks.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-62252832714560513462014-03-17T09:38:12.695-04:002014-03-17T09:38:12.695-04:00Increasingly, there are the DIY dividend investors...Increasingly, there are the DIY dividend investors (usually retired) seeking income and not alpha who use concentrated dividend stock portfolios. They buy and hold sector diversified assets and like the fact of no annual costs. In unregistered accounts, the 'clean' stock dividends make DIY bookkeeping/tax time easy unlike the 'dirty' XIU returns which complicate due to their ROC and other income returns. Regarding banks, they buy Canada's premier bank (TD), Canada's biggest bank, and the internationals BMO and BNS.Jon Evannoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-75465056542903993062014-03-15T19:20:08.769-04:002014-03-15T19:20:08.769-04:00@Jon Evan: Concentrated portfolios only make sens...@Jon Evan: Concentrated portfolios only make sense for those who have an expectation of positive alpha after expenses. This can only be true of a very small minority of investors. Owning 6 banks is more diversified than owning one bank. Having six banks offers nothing in terms of sector risk, but it does reduce company risk. The vast majority of people who think they can pick the best bank are just overconfident.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-75791474023252599012014-03-15T13:26:33.664-04:002014-03-15T13:26:33.664-04:00Concentrated asset portfolios exist and make sense...Concentrated asset portfolios exist and make sense. While sector diversification is obvious, sector asset representation need not mean owning all the stocks of that sector. XIU has six banks. Does that really add to diversification? Is it really necessary to own all the financials to have a balanced portfolio? It would say not.Jon Evannoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-45766240654510461922014-03-12T10:44:29.011-04:002014-03-12T10:44:29.011-04:00@Chris: I decided to wait and see about HXT and it...@Chris: I decided to wait and see about HXT and its swap structure and CRA's take on it. So far I've voted with my own dollars on VCN because of the greater diversification.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-46413554365759384882014-03-11T22:36:58.769-04:002014-03-11T22:36:58.769-04:00What are you thoughts on HXT versus XIU. I have H...What are you thoughts on HXT versus XIU. I have HXT because it`s comm free through scotia.Chrisnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-76467591784646877142014-03-10T22:17:55.660-04:002014-03-10T22:17:55.660-04:00@CCP: Thanks. I'm inclined to just wait and s...@CCP: Thanks. I'm inclined to just wait and see if a competitor ETF comes along to reduce MERs. That' sort of what happened with VCN being an approximate replacement for XIU+XCS.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-16524073109852376872014-03-10T22:03:00.350-04:002014-03-10T22:03:00.350-04:00Nicely explained. I have to say I have never under...Nicely explained. I have to say I have never understood the appeal of unbundling low-cost ETFs with many holdings like XIU. As you point out, we're probably talking about a couple of hundred dollars savings on $500K holding, and even then, that's only if you execute perfectly, which no one will actually do.<br /><br />The only time I could ever see this making any sense is with something like a Canadian REIT ETF, where you could probably replicate it very closely with 10-15 holdings and avoid a fairly high fee of 0.60%. But even then, it's a bit like doing your own oil changes to save $40.Canadian Couch Potatohttp://canadiancouchpotato.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-56891505573125604872014-03-10T18:37:47.961-04:002014-03-10T18:37:47.961-04:00@CanadianInvestor: True. But as I pointed out in...@CanadianInvestor: True. But as I pointed out in the post, this reduction in diversification has a cost.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-55411584849898883652014-03-10T18:32:59.123-04:002014-03-10T18:32:59.123-04:00Some ETFs use sampling to replicate the performanc...Some ETFs use sampling to replicate the performance with only a much smaller subset of stocks. CanadianInvestorhttps://www.blogger.com/profile/05645767559302303541noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-20122553371528550782014-03-10T14:19:14.515-04:002014-03-10T14:19:14.515-04:00@Anonymous: VCN looks good to me, but I'm inte...@Anonymous: VCN looks good to me, but I'm interested in hearing alternate points of view in case I've missed something. Thanks.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-58924006873417946492014-03-10T13:00:13.649-04:002014-03-10T13:00:13.649-04:00Looking a it your way, VCN is quite a bargain for ...Looking a it your way, VCN is quite a bargain for hoding 247 stocks at a 0.12% management fee. Great analysis!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-82262416293526441022014-03-10T09:53:26.348-04:002014-03-10T09:53:26.348-04:00@AnatoliN: Agreed. I'm doubtful that there is...@AnatoliN: Agreed. I'm doubtful that there is a way to save money even before valuing Dan's time.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-10484896050681631952014-03-10T09:51:13.802-04:002014-03-10T09:51:13.802-04:00One more cost to add to this calculation: Dan'...One more cost to add to this calculation: Dan's time in learning all this and actually doing it. By the same reason I do not bake bread.AnatoliNhttps://www.blogger.com/profile/07937984526970646627noreply@blogger.com