Mike PhilbrickBMO S&P/TSX Capped Composite Index ETF.ZCN.TOBUYOct 29, 2025
ZCN vs. ZDV
ZDV has no covered writing, nothing fancy. Financials are ~41%, energy ~18%. In a correction, generally the dividend stocks do better because they have the cash yields attached to them. Also because it usually has a greater weighting in utilities (these still provide needs, not wants, in a downturn).
ZCN has less exposure to financials or to the dividend side of the equation. Has fewer utilities. More oil & gas, gold, metals, materials. In a resource boom, and with all the things tied to AI, this one will do better.
When you buy an ETF from a BMO or Blackrock, it will be well-capitalized. Don't worry about bid/ask spreads or liquidity. ZCN is the Canadian benchmark. Don't worry about capitalization. ZCN is a plain vanilla product. He prefers an inverse ETF (see top picks).
You get the large-cap TSX names. It bottomed at Christmas, rose, had a bad May and rising this month. This is a single-take solution for Canadian stocks. A caveat: these are large-caps, not small, but this should do well.
Broad exposure to Canadian ETFs. It is close to all time highs and so is not attractive. This is not the time to buy it. It would be more attractive at the lows of last year.
One of five ways to get pure, low-cost, passive Canadian ETFs like VCN. Canada's markets are mostly financials and energy which can be volatile. But these ETFs are perfectly fine. Charges only 6 basis points.
XIC-T vs. ZCN-T. He does not know the difference between them. The Canadian market is the least diversified in the world. He does not want to own anything that tracks the TSX unless we are in boom time in the banks or commodities. He does not invest in ETFs.
XIC-T is also the same index, but these are the goto names for low cost in the Canadian market. Very low MER. You can supplement this with factor strategies.
ZDV has no covered writing, nothing fancy. Financials are ~41%, energy ~18%. In a correction, generally the dividend stocks do better because they have the cash yields attached to them. Also because it usually has a greater weighting in utilities (these still provide needs, not wants, in a downturn).
ZCN has less exposure to financials or to the dividend side of the equation. Has fewer utilities. More oil & gas, gold, metals, materials. In a resource boom, and with all the things tied to AI, this one will do better.