Q: Where does ZPAY.U fall in the selection of Canadian ETF’s?
5i Research Answer:
ZPAY is a $400M ETF with fees of 0.71%, and three-year annualized return of 4.22% and indicated yield of 6.45%. It invests in large US blue-chip companies and attempts to mitigage downside risk with derivatives. It holds 40% cash equivalents which also reduces risks. It is doing what it intends to, but investors are giving up gains potential for capital preservation. For example, a basic US ETF such as SPY has returned more than twice as much (10.66%) in the same period. Essentially, investors are paying high fees for GIC-like returns, and we would not give it a very high ranking.