Q: This ETF has been recommended as a primary holding by a financial advisor. I see that it pays a small dividend. Do you know if there would be an annual capital gain/loss even if a person continues to hold? What are your comments (good and bad) about having this as part of their portfolio?
5i Research Answer:
We like XAW. As an 'ex-Canada' ETF it can be beneficial to help Canadians diversify their portfolios. It does have 62% US exposure now. Indicated yield is 1.62%. Its annualized five-year return is 10.77%. Gains or course are not guaranteed, and it is an all-equity fund so its performance will depend on the market. Gains/losses will certainly exist and are considered capital transactions for taxes once the fund is sold (assuming a taxable account). Fees are 0.22%. For general stock market exposure, we think it is a good ETF overall.