Q: What is your opinion of ZGRO.T vs a larger asset allocation ETF such as XGRO or ZGRO for a retiree who desires monthly income with a growth component? Thanks for all your great work.
5i Research Answer:
ZGRO.T targets an annual distribution of 6% and has a monthly payout frequency. It has the same portfolio as ZGRO, but if the underlying income from its holdings does not meet the 6% target distribution, it uses Return of Capital (RoC) to make up the difference.
ZGRO and ZGRO.T should effectively have a nearly identical total return when factoring in distributions. We would not expect much in the way of capital appreciation from ZGRO.T, especially relative to ZGRO or XGRO, but for some upside price potential and a good 6% distribution yield paid out monthly, we think it is OK for income-focused investors.