Tips to boost your dividend portfolio, diversifying your ETFs and the long and short on Canadian banks: What you need to know in investing this week


Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.

John Heinzl’s secrets for building a powerful dividend growth portfolio

As the Globe and Mail’s Yield Hog columnist, John Heinzl has written hundreds of articles about dividend investing, covering everything from the tax and behavioral advantages to the excellent long-term returns that dividend-paying stocks have delivered. To help you access this content, he’s compiled links to some of his most useful dividend columns. Whether you’re just starting out with dividend stocks or you’re an experienced investor who wants to refresh your understanding of the dividend tax credit or dividend reinvestment plans, there’s something here for you.

Related: John Heinzl’s model dividend growth portfolio

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More from John Heinzl: Why this Income Fund’s high payout isn’t a free lunch for investors

Rob Carrick’s 2019 ETF Buyer’s Guide: Best U.S. and global dividend funds

The Canadian stock market’s problem with diversification is a particular challenge for dividend investors, Rob Carrick writes. The S&P/TSX composite index is close to one-third weighted to financial stocks. Because so many financials are good dividend-payers, investors seeking dividend income can end up with much higher levels of exposure to banks, insurers and investment firms. Adding some U.S. or global dividend ETFs to your portfolio is a way to break the dominance of financial stocks in a dividend portfolio. In this final installment of the buyers’ guide, you’ll find funds with much lower exposure to financials than their Canadian counterparts and much bigger holdings in sectors like health care and technology, where the Canadian stock market is weak.

Related: ETF Buyer’s Guide 2019: The complete series

More from Rob Carrick: Recently divorced woman has $100,000 to invest in something secure

The long and short on Canadian banks

Nothing captures the attention of domestic investors like Americans shorting our bank stocks, Scott Barlow writes. The furor continued Tuesday with an appearance by U.S. hedge fund manager Steve Eisman, who holds short positions on Canadian banks, on BNN Bloomberg. Famous for his prescient call against the United States housing market before the 2008 global financial crisis, he is one of the fantastically profitable wagers profiled in Michael Lewis’s book The Big Short. ‘I don’t think there’s a Canadian bank CEO that knows what a credit cycle really looks like,” he said. “… I just think, psychologically, they’re extremely ill-prepared.” The problem with the thesis, Tim Kiladze and James Bradshaw write, is that there are a number of holes in it.

Gordon Pape: My TFSA portfolio has emerged from the market turmoil in great shape

It’s been a volatile six months for the stock market. The major indexes plunged almost 20 per cent in December but then rallied back for strong start in 2019. When your money is invested in an all-stock portfolio, times like this can be highly unsettling, Gordon Pape writes. So, what was the overall impact on my Aggressive TFSA Portfolio? Actually, we came out of the market turmoil looking pretty good. Here’s how he did it.

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RBC, TD threatened with lawsuit over ‘closet indexers’

Two of Canada’s largest investment managers are being threatened with a class-action lawsuit that claims investors were overcharged for actively managed mutual funds that did little more than mimic their benchmark indexes, Clare O’Hara writes. Two law firms filed proposed class-action lawsuits Tuesday in the Supreme Court of British Columbia against TD Asset Management and RBC Global Asset Management and its subsidiary, Royal Trust Co. They target two widely held mutual funds: the RBC Canadian Equity Fund and the TD Canadian Equity Fund. The proposed class actions allege that excessive fees paid to RBC and TD over many years have significantly reduced the returns of investors. Both RBC and TD declined to comment on the matter.

An investor pays a higher fee for a mutual fund than for an index fund on the assumption that they are getting active management that could ideally produce better returns. But some funds have encountered criticism that their holdings are largely the same as what benchmark indexes, such as the S&P/TSX composite index, are comprised of. Such funds have been nicknamed “closet indexers.”

What investors need to know for the week ahead

Eyes will be on Alberta this coming week as the province votes on Tuesday. It will be a shortened trading week as markets in Canada and the United States will be closed on the holiday Friday. Companies reporting earnings include Aphria, Citigroup, Rio Tinto, Charles Schwab, Bank of America, BlackRock, CSX, IBM, Johnson & Johnson, Netflix, UnitedHealth Group, BHP Billiton, Abbott Laboratories, Kinder Morgan, Metro, PepsiCo, American Express, Philip Morris, Rogers Communications and Union Pacific. Economic data on tap include: Canadian existing home sales, average prices and MLS Price Index for March (Monday); Canadian manufacturing sales and orders, plus international securities transactions for February (Tuesday); Canada’s inflation figures for March and U.S. goods and services trade balance plus wholesale inventories for February (Wednesday); Canadian retail sales for February and U.S. retail sales for March (Thursday); and U.S. housing starts and building permits for March (Friday).

Looking for more investing ideas and opinions?

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Will power: How to ensure your estate plan benefits your heirs, not the tax man

As a new home owner, how can I pay for expensive ‘surprises’ without tapping family or credit cards?

Fifteen dividend growth stocks showing good corporate governance

The hot stock picks that made the rounds at this week’s gathering of value investors

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Source: The Globe and Mail

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