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In this post, we will be comparing two popular Canadian Index ETFs: XIU Ishares S&P TSX 60 Index vs XIC Ishares Core S&P TSX Capped Composite index. Fisrt, we will discuss the difference at the index level. Then, a full comparison of key metrics: Volatility, Management Expense Ratio, Historical performance and Dividend yield.
What’s an ETF?
refer to our previous post: Everything you need to know about ETFs
What’s an Index ETF
There are several types of Exchange traded funds. Index ETFs are the king of the hill. In fact, the first ever ETF introduced to a North American Exchange was an index ETF. Index ETFs offer exposure to a large number of securities and sometimes to the whole market at a very low cost. Their main goal is to acquire, on your behalf, all the securities that constitute a specific index in order to achieve the same return of the tracked index minus the fees.
Does an index ETF pay dividend?
Yes they do. Since Index ETFs holds all shares of companies part of the index, if these companies pay dividends then a dividend will be distributed. See below the performance table, the dividend yield is included.
Index definition
S&P/TSX Capped Composite Index (Index)
includes over 200 top-ranked Canadian stocks, representing approximately 95% of the Canadian equity market. Constituent securities must pass minimum float-adjusted and liquidity screens to qualify and maintain membership in the Index. Index weights are capped at 10% of the Index’s float-adjusted market capitalization and are reviewed quarterly.
S&P/TSX 60
An index constituted of the 60 largest companies in the Toronto Stock Exchange
