The Panic-Proof Portfolio (Stockchase Research)BMO Ultra Short-Term BondZST.TOTOP PICKNov 06, 2025

It buys discount bonds. A TFSA is the wrong vehicle for this; a taxable account is. ZST is an income strategy, a balanced full with global and domestic dividends, preferred shares and bonds, a nice mix of income. It's like a money market vehicle and your capital is not at risk. He prefers ZMI.

ZUS.U is US exposure. Money market rates and short-term corporate rates in the US haven't come down. The BOC has rapidly cut interest rates, while the Fed is just starting. So you'll get a naturally higher yield in the US.

The difference is if you need that USD yield and income. Yes it's a higher yield, but now you're exposed to the US dollar rather than just a CAD investment. You have to look at your currency exposure too, not just compare the yields.

When he compares these two, it's on total return not just the yield. If you look at the price charts of these 2 ETFs over the last few years, you'll notice that in this falling rate environment the money market securities have a very slight downward trend in terms of their average price. Whereas ZST and its corporate bonds have a very slight upward trajectory, owing to their slightly longer duration.

When you look at the coupon payments, largely what's in ZMMK is commercial paper. While that's corporate credit, Canadian government bills and so on, there's still overall an aggregate yield that's less than what you're getting on a total return basis. 

A lot of the bonds under a year that are being purchased in ZST are being purchased at a discount. So you get the coupon plus a little bit of capital growth. Total return is not a lot more, but still more.

Money-market version of corporate bonds. Pays a premium to government T-bills. More cash-like, so use this one if you're trying to reduce risk in your portfolio.

It invests in corporate bonds and pays out all the income from them. Don't expect capital gains. Over the last 15 years, the average gain is over 2%. Remember, these are money market funds so were hardly returns after Covid, though as interest rates have normalized, the returns look compelling now. It's the best money market solution for those looking for a little extra yield with the safety of money markets.

Invests only in short-term corporate bonds, and it pays out all that income. With this type of vehicle, there should be no expectation of capital gains. If you look at a total return chart, the average gain over 15 years is just over 2%.

Remember that this is money market in an era where money market yields were very low, and went to 0% in Canada, while corporate bonds were trading sub-1%. Very hard to get a positive return for a couple of years after Covid. As interest rates have normalized, the returns there have gotten very compelling.

Corporate debt -- slightly higher risk, so you get a premium yield. No junk bonds. Best-quality corporate bonds in Canada. Some credit risk, but quality holdings make this minimal. Money-market like, very safe, additional yield. It's still the best money market solution for investors looking for a bit of extra yield.

Is the best money-market-type ETF. ZST buys corporate bonds under and gets a premium over the typical money market fund. He likes the enhanced yield. In a taxable account, the gains are income. So, there isn't a safe ETF out there.

ETF designed as a money market security, but it buys short-term corporate bonds under a year. Because they're corporate bonds, they attract a premium over government bonds. Generally one of the best money-market solutions out there.

Yes, it's a very safe vehicle. It's a good way to extract a bit more yield than from just a traditional money market account.

The challenge is that it's fully taxable. Instead you may want to look at some preferred securities, which give you a bit higher yield (bit more risk, but better tax treatment). Investors will need to do their own research on individual ETFs. Whatever the choice, it can be combined with ZST for safety of principal.

Very good short-term bond product, with a good mix of bonds. Doesn't have any now, but has owned in past. Wouldn't hesitate to buy again. Right now, you want bonds as short as you can get them.

Avoid. GICs are guaranteed, but bond ETFs are not. In 2022, when rates starting going up, bond funds traded down. A bond ETF can be part of a portfolio and work well, but they haven't added much in recent years. Better to look at 10-20 years in bond maturities. These are not safe.

Corporate-based money market account. Will generate about 30 bps (ballpark) more than what you'd get in a traditional money market fund. Canadian T-bills from 1 month to 1 year are roughly at a 2.6% yield; add a small fee for running the money market fund, and your yield is about 2.5%.

With ZST, you'll get something like 2.8-2.9%. Very safe, very high quality corporate credits in Canada. Great vehicle for a number of years to get an enhanced yield on your cash savings.

Basically, it's a corporate money market fund. Is a lot safer than JAAA in terms of credit risk and dividend yield. Note: High-interest savings ETFs used to pay more than money-market funds until the government got rid of that. The best of the lot is ZST.