Opinions
Colin Cieszynski
BMO Ultra Short-Term Bond ETF
ZST.L-T
PAST TOP PICK
Nov 29, 2024
Stock price when the opinion was issued
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If you're looking for something safe, for 1-2 years and aside from GICs, he'd recommend ZST or ZST.L (this version accumulates the units). Yield would be ~4.9-5%. Very safe, very short-term with 3-4 month, investment-grade corporate bonds. Inexpensive. A way to get a diversified basket of bonds.
Likes the idea of PSA. TLT, he believes, is a leveraged play on the bond market and wouldn't do that. BNS high interest savings, for example, pays 4.75% for optionality and no risk.
For an ETF filled with 1-year bonds that's very low risk, look at ZST.L. Pays a high dividend, though it's interest. Very competitive rate. If interest rates come down, you might even get a bit of capital appreciation.
In his portfolios, he can go between 100% equity and 100% cash. When things go awry, he can sell equities and go to cash. For him, this means short-term money markets and bonds. This ETF holds bonds with maturities of less than 1 year. It's like cash that you earn a bit of money on. Yield is 4.9%.
A call on being conservative. He started to see a bit of weakness in some of his indicators; understandable given how fast markets came down, combined with seasonality, economic outlook, and political cycle. A place to go with so many uncertainties out there.
This pick is the ".L" version with accumulating units; reinvests proceeds as interest comes in. More tax-efficient for non-registered accounts, such as cash and margin accounts. The plain vanilla ZST is good for registered accounts.
(Note the short timeframe.)
A substitute for cash when you're feeling a bit cautious. Slow and steady, conservative. When he chose it markets were selling off, presidential election was looming, seasonal weakness was upon us. And then the bull market resumed a week later.