John DeGoeyBMO Low Volatility Cdn Eqty ETFZLB.TOTOP PICKDec 06, 2012

From his team's research, low volatility is a fairly good factor to use in Canada. In Canada it seems to work (though in the US it doesn't). Appropriate for investors who want to take a fairly conservative stance but still want to participate in equity markets.

Portfolio of low-beta stocks. Consumer staples, some financials, utilities. MER is 39 bps, not exactly cheap but not overly expensive. For the investor looking for dividends plus a low ride in the equity market. 

Consumer staples and utilities in Canada aren't cheap right now, as people flock to safety. At some point, investors will move away from the safe stuff and more into risk-on equities like technology, financials, and industrials. He's not in the recession camp right now, so he wouldn't want to hold a big chunk of consumer staples.

He doesn't buy low-vols, because they drag on performance.

Get similar or better returns with less risk, beta, volatility. Well constructed product. Skews more to certain sectors like utilities and financial services, so you'll see underperformance. For 5-10-15-20 years, it's a thoughtful way to get returns from the market. Try XMV, which creates a portfolio of minimum volatility. You could use these 2 ETFs together.