Hi, newb canadian investor here.
I have some money in VGRO in a TFSA. One of my friends told me to invest money in stocks that yield more dividends (ZWA, ZWC, ZWE to be precise).
My question is : how do you calculate which is better?
By comparison :
VGRO - manag. fees 0.20 % but dividends yield only 0.32 % dividends.
ZWE - manag. fees 0.65 % but dividends are 6.87 %.
Some other users have mentionned the Z-series stocks, and I was wondering how to decide which is better. Higher dividends does seem better but I'd rather get another opinion.
Thanks mustachios
VGRO invests in the world. The whole world. You can buy that and nothing else and be just fine.
ZWE is *Europe, High Dividend, Covered Call, Hedged to CAD* Holy fuck.
No novice wants to go anywhere near the latter.
Z-'series' is not a series, it just tends to be that BMO's ETFs start with a Z, just like Vanguard ones start with a V, a lot of original iShares/Blackrock ones start with X. You can get 'good' BMO ETFs like ZEA, and 'bad' ones - from a Couch Potato/lazy investor perspective - like ZWE.
VGRO is new, I doubt the yield will be that low. Probably more like 2%, 2.5% going forward.
Yield is nice but not necessary in retirement. Yield is (usually) money a company gives back to shareholders. ZWE is nothing like that, it is BMO trying to make money using covered calls (advanced trading stuff). Instead of yield, instead of a company paying a dividend, you can just sell a small fraction of the shares you own in retirement. Before retirement, you don't need income, so you'll just reinvest that money.