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iShares S&P/TSX Composite High Dividend Index ETF (XEI)
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iShares Core MSCI Canadian Quality Dividend Index ETF (XDIV)
Q: Which would you prefer for a 2 to 3 year hold and why? Thanx.
5i Research Answer:
Performance wise, XDIV has been superior historically, with an annualized return since inception of 8.55% while XEI has generated 6.60%. Also over the last three years, XDIV has generated a total annualized return of 12.64% vs. XEI at 10.92%. XDIV is also cheaper with an MER at 0.11%, which is half that of what XEI charges (0.22%). XDIV does pay a alightly lower yield of 4.64% versus XEI paying 5.16%. We would prefer XDIV due to historical outperformance along with the lower expense ratio. These are quite similar options and outside of the slight difference in yield, XDIV also holds a more concetrated portfolio of 17 holdings versus XEI's 75.