Q: What is your favourite etf for Canadian banks? Is CPD a good way to gain exposure to them?
5i Research Answer:
CPD is an ETF that holds preferred shares of various Canadian companies, ranging from the financials, energy, utilities, real estate, and other sectors. This ETF has a good yield, but it does not provide much in the way of capital appreciation for those looking for direct exposure to the underlying companies.
For an ETF that provides an investor with exposure to Canadian banks, we prefer the BMO Equal Weight Banks ETF (ZEB). The ETF has a yield of ~4.9%, an MER of 0.28%, and an AUM of $3.8B. It holds an equal weighting between the six large Canadian banks.