Richard OrrellBMO EQUAL WEIGHT BANKS INDEX ETFZEB.TOHOLDJan 29, 2026

Can't go wrong betting on equal-weight Canadian banks. Excellent performer for decades. Great dividends, great coverage, well regulated. Loves it! He's been saying for the last 6 months or so that valuation is high. But we're up over that time.

When we do get that economic slowdown, banks are going to get hit the hardest. Especially in Canada. When will that be? We don't know.

He certainly wouldn't be adding new $$. No reason to rush out and sell. Could grind a bit higher. The way for most Canadians to play the sector is to buy on dips and corrections.

If we get close (and he thinks we are) to an economic environment in Canada where we're worried about recession and job growth, Canadian banks will underperform and go down more significantly than the broader market decline.

Not as defensive as ZWB, where the covered call overlay (and its extra yield) adds another layer of defense. Loves Canadian banks for the long term, but not a place for new $$ right now.

Banks in general have peaked but Royal Bank is a little different and is sort of at a base level. He holds TD and CIBC.  Long term banks are good but we are entering a pause period which could go for up to a year. He is not recommending buying banks now,

Stalwart performer. Countries like Canada are going to benefit from a commodity super-cycle, and banks in Canada are going to benefit from that as well. Real estate side is a bit of a drag. Good exposure.

Without knowing position size in a portfolio, he wouldn't be in a rush to sell. His weighting would probably be slightly above the index weighting.

Equal weight exposure to the Big 6 Canadian banks. Well capitalized, strong balance sheets. Earnings growth still constrained a bit by loan demand issues and higher credit provisions. But on balance, a good place to be. Reasonable valuations. Strong dividends. Expecting a tailwind from rate cuts and rate cut expectations.

Good for long-term, income-oriented investors. Canadian banks will benefit from global flows moving into Canada. Banks will take advantage of resource expansion that comes along with AI adoption.

Canadian market's outperforming the US market and has been for 18 months. Who would have guessed at the beginning of the year? Once that starts, it usually goes on to behave that way for 7-9 years at a time. Important big picture:  international markets, which include Canada, are in a great spot.
 
To get a bit more granular, there's ZEB. Equally weighted bank index. Has had rising RSI versus the S&P since April of this year. In a very tight trading range, which means lots of buyers under the surface.

Good growth, with a yield of 4%. Canadian banks are exposed to real estate. But also exposed to the resource sector, which is very positive going forward with the AI buildout. Canada has to get over its "carbon embarrassment". 

Good exposure to the space without using covered calls (which sacrifice upside potential).

The performance of the Canadian banks surprises him and he is positive going forward. He's owned ZEB in the past.

Investor is holding HDIV, ZWC, SMAX, and ZEB. By holding all of these, it looks as though you're diversified but you're just duplicating a lot of the strategies.

Likes HDIV a lot for yield-seeking investors. A nice strategy, and you probably don't need a whole lot beyond that.

It's about diversification. This one is the banks in equal weight. It protects you from a bank-specific fiasco such as, for example, TD money laundering. The impact of that is spread out and diversified.

They're popular, because people want the extra yield, but they work only in some environments. Better when you expects markets to go down for 6-12 months (a correction). In rapid declines, like Covid, you get only some protection. But in a strong market, you give you the upside and lag the market a lot. Just owning ZEB since 2011, you would have made 10.71% annualized; ZWB 8.34%. So, use ZWB defensively at some point after a correction, say 10% or 15% down. Use ZEB in a strong rally. During strong declines, both ETFs fall roughly the same, but during the recent strong rally, ZEB was 16.98% and ZWB 14.85%.

Just the Canadian banks, no options, so will participate fully in a market rise.

Because there's no covered call strategy, if we get into a bull market you get full advantage of the upside. Upside hasn't been "called away" to provide an income stream. Perhaps lower income, but more capital appreciation along the way.