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iShares Canadian Financial Monthly Income ETF (FIE)
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iShares S&P/TSX Composite High Dividend Index ETF (XEI)
Q: 20% of my income portfolio is FIE (~6% yield) but I am considering a switch to XEI (~5% yield) for broader diversification. Which ETF is likely to perform better as interest rates decline?
5i Research Answer:
It's a tough call and will depend on sector performance. FIE is about 73% financials, XEI is 23%. Financials can do well with lower rates. XEI has more exposure to energy, and of course that sector is volatile but can surge at times. FIE has the 'potential' to do better but we would prefer XEI overall for better diversification of monthly income.