Friday, January 4, 2013

XMD: Looking to drop this ETF from my portfolio

iShares S&P Completion Index fund may be dropped from my portfolio if I can find a better place to park the money. The dividend for 800 shares wasn't even twenty dollars. $19.34 was deposited to my account, to be exact. Not good enough. My wife and I cannot live on that kind of income.

Cathedral Energy (CET) interests me and if Penn West has a little dip I can see buying a little PWT for a short period. I'm looking at REM (iShares FTSE NAReit Mortgage Plus Capped Index fund). It has been good to me so far but hear rumbling about some of the companies that are found in this ETF mix. Still, the dividend is amazing, 12 percent today, and as the economy recovers there is a lot of upside potential.

Oh well, there is always that old standby, TD Monthly Income (TDB622). I  have owned it for years and as I approach my 70s it looks better and better. With a MER of 1.48% the cost is a little high but it has such a sterling track record that it is still attractive to a retiree like me. I already have about 15 percent of my portfolio tucked away in TDB622. It pays better than XMD, or at least it is more dependable, so the move would look good on my bottom line, plus it promises a little growth along with an improved dividend.

2 comments:

  1. The point of owning XMD ETF (mid/small cap. companies) is for the growth characteristics, not the dividend stream. Dividends have to come from somewhere. Re.investment of earnings in the company is better use than borrowing for expansion. Dividend paying companies tend to be in mature industries with excess cash flow. If you need a current revenue stream & are unwilling to speculate on future price appreciation why did you invest in xmd? The yield is published.

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  2. You are quite right and growth is the reason that I have nearly a thousand shares of XMD in my portfolio. But, I am now retired. I live on my dividends. When I was approaching retirement, I was not as dividend focused as I am today. I have kept a portion of my portfolio in XMD for years. Today I am in the process of simplifying my portfolio. At some point, when interest rates recover somewhat, I may move some of my portfolio into one or more annuities. Thank you for the comment. You shed light on why one spices a growing portfolio with an ETF like XMD. (P.S. Sorry it took so long to post your comment but it was treated as spam by my software.)

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