The Problem With Market Capitalization-Weighted Index ETF's

The majority of ETF investors in Canada are choosing low MER ETF’s which track broad indexes such as the S&P/TSX Composite Index or the TSX 60 Large Cap Index. While low fees are an attractive selling point, there are fundamental flaws when investing in market capitalization-weighted indexes. A solution exists, called fundamental indexing, and has proven to better protect investors during recessionary periods. Read on to learn more and invest better!

S&P/TSX Dividend Aristocrats Index

In Part 2 of our analysis of Canadian Dividend Index ETF’s, we take a look at the S&P/TSX Dividend Aristocrats Index and compare it with the S&P/TSX High Dividend Index. While both Indexes sound attractive to dividend investors, their methodologies are extremely different. We’ll compare and contrast the two, and take a look at their medium and long-term historical risk and return metrics to pick the winner.

Canadian High Dividend Index

Dividend investors believe that investing based on yields will deliver superior performance than just investing in a broad, market-weighted basket of stocks. But does this strategy make sense? Today I will begin part one of a two part series on dividend investing by looking at the popular S&P/TSX Composite High Dividend Index. I’ll give an overview of its methodology and take a look at its historical risk and return metrics and contrast them with its natural competitors: the S&P/TSX Composite Index and the S&P/TSX Large Cap Index. After seeing the facts, you can be the judge!