BMO Equal Weight US Banks ETF (ZBK.TO)

US banks were hit very hard in the 1^st quarter. Because his families are over the $5.5 million level, they can’t really own US stocks directly. This is a great compromise. It has more of a bias towards super regionals in the US, but still has some money centres. Thinks that in the next 3-5 years, you are going to see a lot of the big banks divest themselves of their investment bankers, and even maybe some of the asset managers.

(A Top Pick June 29/15. Up 5.83%.) Likes the US banks and thinks they are going to lead next year. This sector and some of the momentum tech names are probably going to be the places to be next year. Still a Buy. Continue to hold for another year.

With every marginal dollar he is investing, he is starting to look for hedged positions. Has been unhedged on purpose for 2 or 3 years and it has worked really well. Continue to hold, but keep an eye on the currency. Still has a lot of momentum.

US Bank equal weight ETF. He is out of it at the moment. It has exposure to US dollars so he would prefer ZUB-T which hedges the currency out. He does not like the US banks right now, however. He would get back in when it gets back to the bottom of his range.

(A Top Pick June 29/15. Down 4.95%.) Banks have had a very poor year in general. You are going to have higher interest rates. When interest rates go higher, the banking sector is one of the best ways to hedge that. If you own, continue to Hold.

You should be in American banks because their housing market is recovering and the Fed is going to raise interest rates. When that yield curve steepens out, everybody will be back to American banks.

This dropped down to the 200 day moving average and has bounced up a little. He likes financials, and is one of the sectors he is focusing on in the US. As interest rates start to move higher, a lot of the legacy issues in terms of litigation, etc. are now behind some of the big money centered banks. He likes the space and will probably start accumulating shares in the banking sector.

This is the equal way to play the banks and it is unhedged. If you like US$’s and exposure, which he doesn’t, this gives you the same holdings as the equal weight bank index (ZUB-T). Right now the Cdn$ might get a couple of cents weaker, but if looking for an investment for the next 5 years, and you like the US banks, the Cdn$ is almost certainly going to recover when oil recovers, you want to hedge the currency, and ZUB would be the way to do that.

Not hedged, but you could use BMO Equal Weight US Banks Hedged to CAD (ZUB-T). This is your choice. The thesis is that as interest rates start humping up, you want to be in the banking sector as their margins will improve. As margins improve, credit quality gets better. Thinks the economy is stronger than a lot of people think, and that the banks are going to lead that.

Gives you un-hedged exposure to US Banks, equally weighted.

Over the near term, there is a little bit left on the Cdn$ falling and the US$ climbing. This is probably not a bad idea as you will probably get a little more upside on the dollar trade. However, at some point over the summer, you are probably going to see a flattening of the Cdn$ and it won’t continue to trend down. If oil starts to rally, the dollar will follow, which could be negative for this position.

BMO Eq Wt US Banks Hedged CAD (ZUB-T) or BMO Equal Weight US Banks (ZBK-T)? Thinks the US banks will probably do pretty good here. US housing is still increasing and US banks is a great way to play that. ZUB would definitely be the way to play it. Regarding hedging, trying to predict currencies is darn near impossible.