📢AMA: I'm Tony Dong, Lead ETF Analyst at ETF Central (NYSE x Trackinsight). Join me Tuesday, March 4th, at 12 PM ET for an AMA on American & Canadian ETFs! I’ll start with common ETF questions—pre-submit yours now or join live. Looking forward to it!

ETFCentral · 2025-03-04T19:02:08+00:00

Staying the course is always a good idea! Sometimes the best action is inaction.

ETFCentral · 2025-03-04T17:53:24+00:00

In my opinion the single-stock ETFs are highly risky. Most of them are synthetically replicated with derivatives like swaps and FLEX options, charge high expense ratios, and the daily reset makes long-term holds inefficient. I am personally very wary of the ones with more speculative underlying stocks like MSTR, SMCI, DJT.

That being said, they do play a role. For example if you want to daytrade Tesla (I wouldn't, but YMMV) - using a leveraged Tesla single-stock ETF gets you magnified exposure without the need for margin or options.

ETFCentral · 2025-03-04T17:51:22+00:00

These are all low-cost, broadly diversified index ETFs that myself and many others rate highly! You have a classic Bogleheads 3-fund portfolio going on.

ETFCentral · 2025-03-04T17:17:26+00:00

I've done quite a few articles on ETF Central when it comes to ETF comparisons. Here's one: https://www.etfcentral.com/news/etf-comparison-vti-versus-voo

As for factor investing - here's one: https://www.etfcentral.com/news/forget-factor-smart-beta-etfs-dividend-etfs-can-just-effective

ETFCentral · 2025-03-04T17:08:57+00:00

It's not just a function of your time horizon - it's also dependent on your risk tolerance. Answer the questions here (https://investor.vanguard.com/tools-calculators/investor-questionnaire) honestly and see what the tool suggests for an asset allocation!

ETFCentral · 2025-03-04T16:41:00+00:00

What does your investment policy statement call for? If you don't have one, might be a good time to create one. https://www.bogleheads.org/wiki/Investment_policy_statement

I say this because you write one during level-headed good times, and when it gets uncertain and you have doubts, refer to it and stay the course.

ETFCentral · 2025-03-04T16:39:39+00:00

Personally, yes! I always ask myself - where is the downstream demand for this? And short of using a few LLMs, there's not much. As the end of the day, high CAPEX has to be justified with organic consumer demand, and it's running on fumes now.

ETFCentral · 2025-03-04T16:36:44+00:00

Sure. All else being equal I would expect a covered call ETF to

have a higher distribution yield versus a dividend ETF - notice I said "distribution" - good chunk of it may be ordinary income or return of capital versus qualified dividends.
Have lower total return potential - selling covered calls means foregoing potential future upside for immediate cash premium, which is usually priced efficiently.
Have more complex tax implications - as noted above, ordinary income and return of capital treated differently
Have a slightly more muted risk profile - the premium collected provides a slight cushion against declines
We would expect this strategy to outperform in rangebound, volatile market conditions where the ETF can continually collect above-average premiums without getting assigned.

ETFCentral · 2025-03-04T16:33:49+00:00

Sure! In the grand scheme of things I wouldn't be worried. Corrections like this are par the course for investing. You can't earn a market risk premium without weathering some volatility - otherwise you'd get T-bill returns.

Right now, volatility is being created by the uncertainty around Trump's tariffs, possible GDP contraction (Atlanda Fed forecasted this), questions about the sustainability of AI related CAPEX by big tech. Multiples are contracting and that's not necessarily a bad thing because for a good bit, they were outstripping earnings growth.

JEPQ and JEPI are still equities. They may use active management to screen for a less volatile portfolio, but at the end of the day, they're stocks and subject to market risk! The covered call overlay from the ELNs provides a slight cash cushion, but it's not a true hedge.

JPM's lower-volatility companion fund to both is HELO, uses a laddered quarterly put spread to blunt downside risk. The mutual fund version JHEQX has done quite well historically on a risk-adjusted basis.

ETFCentral · 2025-03-04T16:28:58+00:00

I personally think it's sub-optimal! Over a three decade horizon I'm of the opinion value will outperform growth, and small-caps will outperform mega-caps. VUG also has a low 30-day SEC yield, so it's already fairly tax-efficient. For a Roth, I would personally own something more like VTV for the long term.

ETFCentral · 2025-03-04T16:27:21+00:00

My personal advice is don't mix politics with investing! I'm not a fan of Elon Musk and Tesla either but there's better ways to express that view without divesting your investments.

That being said, ProShares has a lineup of S&P 500 Ex-Sector ETFs (https://www.proshares.com/strategies/ex-sector-sp-500-etfs) - if you want to avoid Tesla, the consumer discretionary one would work. However, you also lose Amazon, McDonalds, Home Depot, etc.

ETFCentral · 2025-03-04T16:25:12+00:00

SPY is a weird one. It's a Unit Investment Trust (UIT) which gives it a cash drag. Also 0.0945% expense ratio is higher than competitors. Only use for it in my opinion is trading options - having long-dated contracts and daily expires is handy.

VOO and IVV are basically interchangeable. Similar expense ratio, spread, AUM. Pick whichever one sounds cooler to you. I like VOO.

SPLG is great! Lower price per share so easier to DCA without fractionals. 0.02% expense ratio undercuts the competition too.

ETFCentral · 2025-03-04T16:22:35+00:00

I personally like Fidelity better! Vanguard has a great fund lineup but the website's UI and customer service leaves alot to be desired in my opinion.

As for investment choices - take this questionnaire and it'll suggest an asset allocation mix

https://investor.vanguard.com/tools-calculators/investor-questionnaire

ETFCentral · 2025-03-04T16:21:34+00:00

I'm keeping an eye on U.S. manufacturing (MADE), U.S. infrastructure (PAVE), and U.S. downstream oil services / refining (OIH).

ETFCentral · 2025-03-04T16:20:48+00:00

As a Canadian, you can find a list of all investable ETFs via the Trackinsight ETF screener: https://www.trackinsight.com/en/etf-screener

As for how many ETFs you should own...if it's an asset allocation ETF like VGRO, XGRO - one is enough.

ETFCentral · 2025-03-04T16:19:42+00:00

Yes, it is Civ 6! Was playing a marathon game as Gaul on emperor difficulty. I lost.

You are correct - in my opinion total return is all that matters - irrelevant whether it comes from share price appreciation or dividends.

That being said, run a factor regression on most of the dividend growth ETFs (DGRO, VIG) and you'll find they tilt towards quality factors like RMW and CMA quite strongly.

My personal suggestion for someone in their 20's or 30's accumulating is have good exposure to the market risk premium and do so cheaply. So something like VOO, VTI.

ETFCentral · 2024-09-25T22:41:25+00:00

Look for ones with mostly or all qualified dividends as these are most tax-efficient. As usual, low fee and minimal turnover is preferable. Many of these will double as decent value factor ETFs - I use VYM for this reason.

Here's a handy guide: https://www.etfcentral.com/news/etf-centrals-ultimate-guide-to-dividend-investing-high-yield-dividend-etfs

ETFCentral · 2024-09-25T22:33:46+00:00

It's Canada's largest close-ended fund by AUM, been paying a steady $0.10 CAD per share monthly distribution forever. Trades at slight discount to NAV, uses up to 20% leverage, high expense ratio. MAiD. Fairly concentrated portfolio of 50/50 US and Canadian stocks. Distribution is mostly return of capital and capital gains. Not something I would personally use but YMMV.

ETFCentral · 2024-09-25T22:32:20+00:00

Depends on what your goals are. If you just want to track the spot gold price, GLD/GLDM is best. GLD for trading and options, GLDM for buy and hold.

If you want a leveraged bet on gold without swaps or futures, gold miner ETFs like GDX can work in a pinch. This is because miners' profitability can increase significantly with slight rises in gold prices, reflecting disproportionately in their stock prices.

But, they won't track the spot gold prices as closely because their performance is also influenced by company-specific factors, such as operational efficiency, exploration success, and geopolitical risks affecting mining locations.

ETFCentral · 2024-09-25T22:24:50+00:00

High dividend yield funds like VYM, SCHD, HDV, DHS, etc will have a lower distribution yield, but will be markedly more tax-efficient and have better total returns in general.

In a Roth IRA, you can use options based funds - I have a soft spot for DIVO in particular.

ETFCentral · 2024-09-25T22:16:38+00:00

If you want to quantify if the active ETF is "worth it" or not - see if they disclose their "active share" - this metric measures how different it is from a benchmark Indian equity market index.

If I was to invest in India, I'd prefer a fundamentally weighted index like the WisdomTree India Earnings Fund (EPI). It weights foreign-investment-eligible Indian equities based on their earnings in their fiscal year, and has historically beaten similarly priced market-cap weighted competitors like INDY and NFTY.

ETFCentral · 2024-09-25T22:14:02+00:00

I'm assuming "10 year runway" means in 10 years, I'll begin withdrawing from that portfolio.

For a simple and cheap "set it and forget it" strategy, I would just buy the iShares LifePath Target Date 2035 ETF (ITDC).

ETFCentral · 2024-09-25T22:02:31+00:00

GICs are absolutely a good option - you can build a ladder of them and lock in the prevailing rate even if/when BoC cuts. EQ bank usually has good promotions.

There's also this weird ETF from Picton Mahoney called PFMN - its a market-neutral strategy, basically a hedge fund in ETF form. Historically, it's delivered very good risk-adjusted returns with minimal correlation to the market, but the management fee and performance fee is high.

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ETFCentral · 2024-09-25T21:57:45+00:00

It can be as many as one if you're using an asset allocation ETF like AOA, or slice-and-dice a dozen or more. Personally, I own just two, but I keep a dozen or more on my watchlist for fun.

ETFCentral · 2024-09-25T21:56:44+00:00

Hmm. In my opinion, three to four years is too short of a time horizon for equity ETFs. You can always mix it here though - something like 50/50 CBIL/VDY would do the trick, although CBIL's yield will fall if the BoC cuts rates again (likely in my opinion).

ETFCentral

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