Opinions
Mike S. Newton, CIM FCSI
BMO Low Volatility Cdn Eqty ETF
ZLB-T
COMMENT
Apr 15, 2015
Stock price when the opinion was issued
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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.
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.
An ETF with low volatility for a portfolio? The go to app for him has been this one. He would also accompany this with a US one if you can do so. On low volatility ETF’s, the underlying names are usually excellent, defensive, dividend paying and the kind of names you want. Also, you are not going to get bumped off because of volatility.