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BMO Covered Call Utilities ETF (ZWU)
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iShares S&P/TSX Capped Utilities Index ETF (XUT)
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Hydro One Limited (H)
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Utilities Select Sector SPDR ETF (XLU)
Q: Planning to consolidate Utility sector in RIF. Current holdings include: ZWU, H, XUT, XLU. Which one would you keep ? Thank you
5i Research Answer:
We think XUT and XLU make sense to keep for Canada and US utility exposure. We do not have a problem with ZWU for income purposes, but there is overlap with XUT and XLU. Over the long-term, XUT and XLU have delivered much higher returns, so if one does not require the income then it makes sense to let go of ZWU. H is included in XUT, so unless an investor wants single stock exposure, there will be overlap here and we do not think it is necessary to keep.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZWU.