David Cockfield BMO MSCI Europe High Quality ZEQ-T BUY Jan 31, 2020

An ETF that focuses on Europe, for a long-term hold? This is one of his favourites in terms of Europe. It has a number of the big European companies. This has a very high-quality portfolio. His only caveat is that it has a number of UK stocks, but feels the BREXIT concerns are probably overdone, and the UK is going to back into some kind of a deal so that BREXIT really isn’t going to happen.

(A Top Pick Aug 12/16. Up 8%.) This has done all right, but it did better in the past. There is some concern right now in that it has a fair amount of UK content. BREXIT has confused the picture. He is now looking at other European ETF’s.

The time to own Europe is now. It’s a pretty easy trade. This trades at about 14X in the next 12 months, versus the TSX at around 16X and the S&P at around 18X. He likes that this has a strong allocation to the consumer, both discretionary and staples and that it is hedged. Pays a 2% dividend yield. There is no withholding tax, as the ETF holds the shares.

There are people concerned about Trump, NAFTA, real estate, etc. and have withdrawn form the market and are sitting on cash. He has come up with suggestions that are relatively safe and represent a broad diversification in relatively safe areas. This represents participation in high quality securities in the European market. One concern he had is that a good chunk of this portfolio is in the UK, and BREXIT has been a problem. Has come to the conclusion that BREXIT probably won’t happen. If so, this ETF will do quite well.

This ETF uses MSCI’s quality screening method to select holdings. These have higher ROE and lower financial leverage. It can therefore take some time for the value to emerge compared to outright market indices. He likes it because it is liquid and attractively priced – although there may be cheaper ETFs out there (XEH-T for example). The offset is that the holdings have relatively high PE ratios due to the quality of the holdings. He would recommend ZDM-T as it offers a higher level of diversification into Asia as well.

(A Top Pick May 18/17 - Up 4%) He is cooler on this one now. They are more Emerging Market than Europe now.

(A Top Pick Sept 28/17, Up 5%) Not an “if” thesis, it’s a “when” thesis. Core holding. Good place to park capital. Trading 13.5x 2019, with similar EPS growth rates. Poor performance is tariff related. Will do well for you if you’re patient.

A good way to play Europe's big 50 stocks. But he's only lost money in Europe because of their politics and staunch unions.