John DeGoey iShares U.S. C$ Hedge ETF CLU-T PAST TOP PICK Nov 08, 2012

It is a rules based algorithm, rather than being actively managed. He doesn’t use them because he favours the ‘3 factor model’ from Dimmensional.

Stock vs. Stock: CLU or ZSP. 1000 large and mid cap stocks. Fundamentally weighted ETF.

Fundamental index ETF. This is a smart index. It looks at cash flow and dividend payouts. They screen for the better stocks and weight the portfolio for the better companies. They don’t always do better than the index. You need to look at return AND risk. This one has been doing well, but not beating the US market in a big way, yet has a higher volatility to the S&P.

Fundamental indexing has had a pretty good run because it has been concentrated in low volatility, dominated by health care and consumer sectors. If we get a more cyclical market you will not do as well. He finds there is a bias in how the numbers are presented for the companies in the ETF. He is not a fan.