TQCD TD Quantitative Dividend Focus ETF Review

本站添加: 2026-06-01

[00:00:01]Quantitative investing, AI, and factor investing. Can it make your retirement better?

[00:00:09]>> Disclaimer, the following is for education and general information only.

[00:00:12]Not investment, legal, or tax advice, and not a recommendation to buy or sell anything. Investing involves risk.

[00:00:20]Dividends are not guaranteed, and past performance does not predict the future.

[00:00:23]I may own positions in securities discussed and may trade at any time.

[00:00:28]>> Hey, what's up Market Moose? Market Moose on the loose. Happy retirement Friday.

[00:00:34]Uh today, we are taking a look at TQCD.

[00:00:38]So, it's TD Quantitative Dividend ETF.

[00:00:43]So, what's the Q? The Q is for quantitative investing.

[00:00:48]Um what's quantitative investing? We're going to take a look at that. We're going to take a look at the ETF, and then we're going to end up wrapping this up by comparing to other dividend-focused ETFs in Canada. And let's see if it makes sense to go for TQCD or another one for your retirement. Of course, the point here is to focus on ETFs that generates some yield. Um in this case, we are talking about a ETF with roughly 60 to 80 stocks. It moves a lot, so it really depends, and we're going to make uh I'm going to explain that to you in a second. Uh the yield is around 2.75.

[00:01:30]Could go up to 3%. Again, it depends. Um 90% plus Canadian stocks, so mostly Canadians, let's put it that way. MER, so management fees slightly over the others that are usually around like.10 to.25. Now, we are at almost.40, so.39%.

[00:01:51]So, slightly more expensive, but this one is active versus a lot of other dividend ETFs that are passive. So, what's the big difference? Well, quantitative investing is when you invest based on mathematical models, algorithm, large data sets. So, long story short, you focus on numbers and data and you take out the emotion, you take out your I don't know, like your gut feeling or your like there's no like portfolio manager saying, "Hey, we're going to make that call because I believe that this will happen." It's all about mostly factor investing, which you focus on specific metrics and when those metrics take the box, you buy. When they don't, you sell or you don't buy, you you move you move over. Uh so, the TD ETF focus on a set of nine metrics. They share publicly four of them. So, return on asset, share buybacks, asset turnover, and operating cash flow. Of course, must be all like great numbers. So, the company that is buying back shares, uh return on asset that is positive, um and then operating cash flow that is positive as well. So, the point is really to determine a set of metrics, kind of like a a a more fancy way that I use the dividend triangle, which is revenue, earnings, and dividend. So, I I I look about on those I look a lot this graph and look at the trends to uh dig further and identify companies that I like or not. Well, in this case, we have like nine metrics, four of them are public. Uh so, now, once you have this model, you don't like you have like a perception on the model, you have the decision on the model as as an ETF manufacturer, but after that, that are based on that, right? So, you do not have kind of like a veto way.

[00:03:55]Uh when you look at the top holdings, I mean, you're not going to be surprised.

[00:04:00]We have right now we have CIBC at like roughly 4%, then Suncor 3.5, Scotiabank 3.5, TD Bank 3.5, Royal Bank TD 3.5, um and National Bank and Pembina Pipeline around 3.30%, then PowerCorp and Brookfield Asset Management. So, nothing very surprising, nothing very original, part of like the classic dividend payers uh of ETFs. In terms of sector allocation, we have also a pretty good replica of what the TSX is. So, we're talking about like 36% financial services, 22% in energy, 16% basic material, and then five 5.5 for industrial services. So, long story short, you're buying Canadian dividend ETFs that everybody knows about that is focused on resources and financial services. So far, pretty much the same thing.

[00:05:06]Um just for fun, what I did is I looked at a few other uh dividend ETFs that are well-known. So, XDIV, the iShares Canadian Quality Dividend ETF, VDY, the Vanguard Canadian High Dividend Yield, um iShares Composite High Dividend ETF, XEI.

[00:05:31]Then I have the Canadian Aristocrats CDZ, and I looked at the overall market.

[00:05:36]Um what was interesting is what I did is I looked at the past 12 months return, 3 years, 5 years, and maximum, which was November of 2019 when um TQCD started trading. So, on a one-year metric, of course, one year doesn't mean much. TQCD is actually behind XDIV, VDY, and XEI.

[00:06:03]The only one that beats is the Canadian Aristocrat, and I can tell you up front, 1, 3, 5 years maximum, the Canadian Aristocrat is always lagging behind. So, we're not going to talk about CDZ too much. This is definitely the one that is not performing versus the others.

[00:06:19]Over 3 years, now it's in on the first position at the 107% total return, so that includes the dividend, of course.

[00:06:28]VDY is at 105, XDIV is at 96. It kind of gives you the the the overall feeling here. Over 5 years, TQCD is also in advance. So, 134%, and then you have XDIV and VDY at 129, 128. XEI always behind as well at the 110, and then Canadian Aristocrat at 78. So, again, XEI and CDZ not the best performing. Where it gets interesting is now you can say, "Okay, so 1 year doesn't mean much, not performing that much. 3 year, 5 years, TQCD kind of like this active way of managing gives them a small edge, but this gives a small edge nonetheless."

[00:07:15]But when you look at since 2019, when they started the ETF, now it shows 147 total return versus XDIV at 158 versus VDY at 176, and then XEI at 142. So, pretty much at the like neck to neck to XEI. The other two, XDIV, VDY, better. So, depending on when you start picking your dates, you're going to either see T EQCD as slightly better or slightly worse than XDIV and VDY. I mean, between you and me, long story short, pretty much the same thing, right? You're not going to make a huge difference, and of course, past performance will not tell you anything about the future. So, just to say all of this, you pay more management fees than the others, and it's pretty much the same performance. Uh just a quick note, it did better than the market for 1, 3, 5 years and since inception, but it's kind of normal because all the others, XDIV, VDY, XEI also did better than the market. So, it's just like dividend growers tend to beat the market over a long period of time. This is also why I prefer to select dividend growers in my portfolio.

[00:08:33]Uh so, it's kind of like getting in a long with all of this. I mean, when I look at the um the top stocks, besides Suncor and Pembina that I'm not that much of a fan, I'm not going to argue about holding bunch of banks. I already told you what I think about that, but I mean, if you hold two of those that of those banks, you would have done great. If you hold all of them, you would have done great also.

[00:08:55]Power Corp, great company. Brookfield, you know, I'm a I'm a fan. So, long story short, my portfolio would look like it would be more diversified than this because now they're just buying more and more of banks.

[00:09:09]Uh but besides that, it's it's it's it's well-built. I mean, it's uh it's built again aligned with what you can find at like the common suspect among the dividend growers in Canada.

[00:09:20]So, if you are retired and you don't really want to manage your portfolio, you could go T EQCD, but I mean, you're going to waste hours and of your life trying to compare them to XDIV and VDY, and you're going to get pretty much the same result. So, all the other ETFs that I've used here in this comparison are passive. This one is active and this one is based on quantitative factors.

[00:09:50]They're not all publicly uh available. So, you have to trust management. They did a good job so far, so it's all right. And it's pretty much the same for a lot of investment products. If you don't trust management, I mean, you might as well just skip this one all together, right? So, in conclusion, if you're retired, you don't want to manage your portfolio, yes, you can fall for that seductive narrative that is like quantitative investing, factor investing, it sounds like amazing. In reality, doesn't change that much. And it reminds me of all of those special funds that we had the chance to meet the the fund manager and the firms when I was a private banker. And they they all pitched, they all come with those like, "Oh, we're doing neutral markets. We're doing quantitative investing. We're focusing on factor."

[00:10:39]And and they all sound super sexy.

[00:10:41]They're all like very interesting because they come with like a bunch of data and they it's very impressive.

[00:10:48]But at the end of the day, is there an added value? I'm still wondering. I mean, in this specific case, it really depends on the on the years that you that you selected. Three and five, slightly better. Since inception, slightly behind.

[00:11:04]In the end, if you like it, you stick to it. It's going to be fine, but that's pretty much my overall thoughts after looking at several Canadian dividend ETFs that are that focus that are on ETFs.

[00:11:17]They're pretty much all the same. They pretty much offer about the same results. So, pick your poison and live with it. That's going to be fine. On my side, I'm going to continue to spend a few hours a year to manage my portfolio my my manage my portfolio, but I totally get that at one point you may not want to do that. Those kind of ETF would do the job. Uh but if you want to mix them with stocks, be very careful because this one specifically especially changes a lot.

[00:11:47]So, you will have different numbers of stocks, different stocks in their top 10 holdings. Uh so, if you hold individual one, of course, if you hold banks, you kind of defeat the purpose. So, try to be a bit more original with your uh stock picking decisions. That's what I would say. All right, Moose. Let me know in the comments on YouTube what you think about TQCD. Uh I just want to let you know it is also the last weekend to join retirement loop. So, if you are interested in building your plan, taking control of your retirement, knowing when to withdraw the money, how to create your income sources, connect with other retirees, now is the time to do it. So, you can look into retirementloop.ca/join or you can watch the webinar that I did last week at retirementloop.ca/webinar.

[00:12:39]Both links are in the description, of course, on YouTube and on Spotify. We're going to talk again on Monday, and until then, don't forget to stay invested.