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claymore fie & action direct

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  • Dec 28th, 2010 11:16 am
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Jan 20, 2007
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Niagara

claymore fie & action direct

I was thinking of buying some fie.to so I decided to check with Action Direct to see if the honour the claymore drip service (getting etf's to drip properly in an action direct account is always a moving target). Anyways, their response was that they only honour DRIP for Claymore advisory etf stocks (fie.a). It looks like fie.a trades on the TSE so I can purchase them myself using the online brokerage service?

I'll never understand why ETFs, Action Direct & DRIP plans need to be so complicated.
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Sep 26, 2007
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what's the difference with fie.a besides paying higher MER?

http://www.claymoreinvestments.ca/en/in ... vices.aspx
looks like the major broker support it.

imo if your getting a monthly income etf it doesn't make a lot of sense to drip.
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Niagara
The only difference between the two is that Action Direct will only DRIP the income from Claymore funds for the .a series. I'm not sure if I could purchase the .a series directly.

Why don't you recommend DRIP programs for income etf's? I figured it was good thing as long as your initial purchase of shares is enough to ensure you get enough income to purchase full shares via the DRIP program every month.
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ancodia wrote: The only difference between the two is that Action Direct will only DRIP the income from Claymore funds for the .a series. I'm not sure if I could purchase the .a series directly.

Why don't you recommend DRIP programs for income etf's? I figured it was good thing as long as your initial purchase of shares is enough to ensure you get enough income to purchase full shares via the DRIP program every month.

If that's the only difference you see then i guess that's what's important.

I guess it's personal preference; on the simplest level it's just not as efficient.
a fund that has to constantly distribute money has less money saved up for it's own investments.
i would expect a fund that didn't have to distribute monthly, all else being equal, to outperform one that does.
the reason why some people like these funds is because it provides them with some cash flow. if your plan is to reinvest the money back into the fund, it seems to defeat the purpose.
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Feb 17, 2007
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xlfe wrote: If that's the only difference you see then i guess that's what's important.

I guess it's personal preference; on the simplest level it's just not as efficient.
a fund that has to constantly distribute money has less money saved up for it's own investments.
i would expect a fund that didn't have to distribute monthly, all else being equal, to outperform one that does.
the reason why some people like these funds is because it provides them with some cash flow. if your plan is to reinvest the money back into the fund, it seems to defeat the purpose.

Well said.

I think they may have to sell some securities to cover the monthly distributions, logically speaking.
Other than that, I don't see a more efficient way of doing it. Borrowing perhaps?
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ACC-Major wrote: Well said.

I think they may have to sell some securities to cover the monthly distributions, logically speaking.
Other than that, I don't see a more efficient way of doing it. Borrowing perhaps?

hmm my theory would be instead of being able to invest in say long term bonds which generally have higher rates
they are forced to buy short term. i think a good manager would be able to cover it but if they can't keep up the cash flow they would have to sell some securities.
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