BMO EQUAL WEIGHT BANKS INDEX ETF (ZEB.TO)

The 6 big banks over the long term are one of the best areas to go into. He likes equal weight and likes CEW-T because of the insurance companies but this one is good. TD-T, BNS-T and RY-T are his favourites if you don’t like an ETF.

Seasonality for bank stocks is from the end of August right through until November. Every year the CEOs report their 4^th quarter results around the 4^th week of November. They love to give you good news at that period of time. Technically it is showing positive signs. It is starting to outperform the market, trading above its 20 day moving average and starting to show signs of bottoming.

Even though banks have gotten battered a little, he would not be hesitant to buy this. There is also BMO Covered Call Cdn Banks (ZWB-T) which he particularly likes.

Stock vs. stock. ZUT-T vs. ZEB-T. Both give you about a 4% yield. ZWB-T gives you the covered call overlay and he prefers this. He would get Utilities AND Banks.

With interest rates supposedly rising in the next 6-8 months, would you choose the BMO Equal Weight Cdn Bank (ZEB-T) or the BMO Covered Call Cdn Banks (ZWB-T)? Generally what you want to know about what works best for a Covered Call strategy, is that when you feel that a particular sector is going to be relatively flat, or maybe slightly negative, that is when you are going to get the dividend on top of the covered call premiums. If you think banks are going to take off and do extremely well, you might as well own the Equal Weight basket.

Banks have 2 periods of seasonal strength. One is from January until the middle of April. The other is from August to October. Technicals on this ETF are very positive. The trend is upwards. The units are trading above their 20 day moving average. Its strength, relative to the S&P 500 and TSE Composite, is currently positive. The key is to stick with the sector until the end of its period of seasonal strength, which turns out to be this week. When you start to see technical deterioration that will be the time to take some profits.

Equally weight bank index in Canada. Looking forward, he suspects bank earnings are going to stabilize. Probably not fall too much, but probably not go up too much from here. When you draw the channels out on the charts for the next year or so, it is probably going to be range bound. You want to have a bit less when it’s near the top and a bit more when it is near the bottom. In a range bound environment, this one is a better holding. BMO Covered Call Cdn Banks (ZWB-T) gives you the same equally weighted banks, but it does a covered call overlay on half the position and gives you about 2% extra a year in dividend returns. Because of this, and a sideways market, this is going to do a little bit better for you.

An equal weight 6 largest Canadian banks ETF. It carries an MER of .62 with a 3.4% dividend expected going forward. Canadian banks have had a bit of a tough time over the last while, given the uncertainty surrounding the Canadian economy, housing market and the energy sector. He still likes banks and thinks they will continue to perform well. The 200 day moving average is still moving upwards and still doing okay. He likes to buy ETF’s when you want to get a diversified basket. This is not a diversified basket. He would prefer to pick 2 or 3 bank stocks.

This is a basket of the big 5 banks in Canada. The only thing about owning an ETF this simple is that you are paying 62 basis points MER. He would rather purchase 2 or 3 Canadian banks separately. Likes the sector long-term.

Likes this, but prefers BMO Covered Call Cdn Banks (ZWB-T).

Just bought this recently. This holds Canadian banks in equal proportions. This has been in a great trend. Any time there is a correction within a trend line on the stock like this, you Buy on an uptrend.

With this you are buying a straight up ownership interest in the major 6 banks and you receive the dividend payment. A very simple ETF with no financial engineering.

Banks. Equally weighted. ZWB-T has the covered call overlay as he thinks the banks will not do much for the next while. Prefers ZWB-T.

(Top Pick Oct 2/13, Up 24.09%) It is going to be very close to financials in general. It outperformed the TSX. There is still no sign of a top.

Equally weighted bank ETF. ZEB-T is the better way to get in. He would be patient until this ETF gets to the $21 area because he expects a pull back. Step aside. There is lots of volatility short term.