Kim BoltonBMO NASDAQ 100 HEDGED TO CAD INDEX ETFZQQ.TODON'T BUYMar 29, 2023

Nothing wrong with this one at all. Gives you your tech exposure.

His rule has always been that if 1 stock out of 30 in a portfolio goes from a 3% weighting to 6%, then he automatically sells half. That system usually compounds returns by 1-2% over a 10-20 year time horizon. Taking $$ off the table has never been a death knell.

If we ever get a larger correction because tech stocks can't sustain the growth they've had, then we're again talking about the dot-com bubble when stocks went down 70%. Took 17 years for the NASDAQ to break even.

Be cautious. These names are very volatile. On the ZQQ, he doesn't understand the hedging. Over time, currency risk becomes benign. All this ETF is doing is paying the banks to buy options or forwards to hedge the currency.

Don't hold both. These 2 ETFs do the same thing. Don't correlate your investments. Diversify away from the NASDAQ with something else, otherwise you'll have volatility every day of the year.

We're at the top of the market. He's not a fan of hedged products, especially with an ETF (it's just a way for them to make some more $$). You can do all that yourself. He'd write some short-dated calls.

In the NASDAQ, it's not as though the tide is lifting all boats. You have to be picky, especially at these lofty levels.

ZQQ is the NASDAQ 100. COST is in the top 10 holdings. Choose this one for more growth long term, but it's absolutely expensive right now. TPU is broader US large-cap exposure. Doesn't track the S&P 500, but very similar. JPM is one of the top 10 holdings.

If you're putting new $$ to work, avoid both for now.

The 3 are on different notches on the dial of risk and growth. Allocate your money according to your risk appetite.

ZUE is solid and probably the safest, even though it has enormous exposure to mega-cap tech companies. There are ETFs to downscale your risk from that, such as RSP (equal weight) and EQL.

ZQQ has been excellent for achieving currency-hedged exposure to the NASDAQ 100. So it's even more tech and growth. Huge demand in 2023 and 2024, but (as we've seen) very exposed to downside volatility in the trade war environment.

SOXX is purely semiconductors. Enormous ups and downs on headline risk with generative AI. Even riskier.

He likes the currency hedges on both. Why choose? You could own both. If we resume the bull market, and resolve that a recession won't happen until 2026, you probably want to be in the NASDAQ as it has more beta. If we resolve to a harder recession and sooner, the S&P would probably go down less but both would be hit.

We need a little more information on which way the market's going to go. By watching and waiting, you're also going to pay a higher price. Perhaps take a little taster now, and see if there's market follow through. If it goes positive, buy more. If there's a further breakdown, cut bait with a smaller loss.

Names are the usual tech suspects. For him, he'd rather pick and choose names for his portfolio, as some names are very expensive and some are very reasonable. MER is 39 bps, and you can probably find cheaper ones in the US. Down 14% from highs, but still up 6.6% in a 1-year timeframe. 

Might make sense for an investor who wants a broader approach and not as much Pepto Bismol ;)

Mag 7 and lots of it, so it will have some volatility. But he still likes it.

Remember that some of the semis are very cyclical. Right now, there's an oversupply on the memory side, which you can see with the likes of ASML. And you can see this ETF rolling over. He stays away from ETFs because they're a mixed bag. The place you want to be in semis is in AI chips -- like NVDA, and AVGO (nipping at NVDA's heels).

Likes it and uses it often. It's fine as a core holding. AI offers huge growth ahead.

Will continue to own shares. Good option for investors to include in portfolio. 

A lot of the tech stocks are approaching their price targets, so what's an investor to do? He always recommends writing some calls, actively managing them. You can do this on ETFs over the counter.

Runway for SOXX is probably longer than that of the ZQQ.

AI is going to be as transformative as the internet. The Magnificent 7 are for real and must be owned, though some are more pricey. When you buy this basket, you get a nice mix and it's just easier. Likes that it's hedged, so you can invest as if you were an American. Likes the tech along with the healthcare names.

62% tech, with the rest being in consumer discretionary, healthcare, etc. Trading about 30x PE, 4.7x price to sales, which is above the 10-year average of 26x PE and 3.8x price to sales. Elevated valuation. He'd prefer the general NASDAQ index over just the tech index. Cost is 39 bps, a portion in your portfolio could make sense.

Prominent names. Be careful of the valuations of NASDAQ, as the average PE is 38x on this ETF, average price to sales is 4.3x. Makes sense as part of a portfolio, but watch the valuation.