-
iShares S&P/TSX Capped Energy Index ETF (XEG $17.20)
-
The Energy Select Sector SPDR Fund (XLE $85.96)
-
Amplify Natural Resources Dividend Income ETF (NDIV $28.70)
Q: Is NDIV a reasonably good natural resources fund? Only 3 years old, has minimal AUM, and there is no Morningstar rating. Selects dividend paying natural resource companies globally. Could be attractive IF it’s managed by Kevin Simpson , who seems to be a great manager running covered call strategies. I cannot tell if NDIV follows such a strategy. Information on ETF data sites is scanty. Would appreciate very much your insight and comments including whether this ETF is a good diversifier. MER 0.59%.
5i Research Answer:
NDIV is a few years old but only has $11M in AUM, and its MER of 0.59% is somewhat high. It has 46 holdings, and its fairly well-diversified across small, mid, and large-cap names. We do not see that it has a covered call strategy, but it has a strong yield of 5.1%.
Largely, we would prefer a more liquid, lower cost, energy ETF with a strong yield and longer track record. XLE and XEG (US and Canadian energy ETFs) have slightly lower yields of about 3.5%, but with stronger liquidity, similar or slightly lower MERs, and similar performance track records.