BMO EQL WGT US BANK HDGD TO CAD IDX ETF (ZUB.TO)

The banks have been beaten up, and have now been cleaned. They’ve gone into every corner of their balance sheet to rectify the situation. They have capital return strategies. Technically speaking, the charts are looking interesting. A single Fed rate hike will not send this flying up into the air, but what will work is the steepening of the yield curve, which is what we are all waiting for. He would be interested in this name, and would suggest a 3^rd now, another position after the election, followed by another 3^rd after a Fed rate hike.

Hedged US bank ETF. You had to wait to get into this sector until the litigation feast was over. The US banks have lagged the industry.

Or ZBK-T. If you want to be in the banks this is probably a good place to be. But he feels US banks will underperform for a long period of time. He does not like the sector.

Loves the big US banks, and owns the unhedged one. He likes that this is equally weighted. About half of this is money centred banks with the other half being super regionals.

Currency Hedged. The markets may have bottomed last week. He bought some last week. He thinks the valuation will run into trouble when it hits the lowering trend line of recent highs.

Hedged or unhedged? Sometime, in the not too distant future, you will be wise to go to hedged. We are pretty close to a bottom, and as a result, it is probably wise to consider buying these things in the hedged version.

He likes the US banks, but doesn’t want it to be currency hedged.

He likes this particular space except that it is hedged to the Cdn$, which he thinks it is not really going to be something that you want to do, given the fact that the US$ continues to move forward. He would prefer the individual names, or an ETF that is not hedged.

US Bank ETF or would an individual bank be better? You are better off to buy a diversified portfolio through an ETF. It gets rid of the risk of a single stock blowing up on you. He would suggest iShares US Financials (IYF-N) which are financials, not just banks. Another is iShares Dow Jones Regional Bank ETF (IAT-N). Or you could look at BMO Equal Weight US Banks Hedged to Cad (ZUB-T). He likes ZUB-T and is the way he would play this.

There is nothing wrong with buying US banks, but questions whether you want to hedge it back to the Cdn$ necessarily. Our dollar has been under pressure and probably will continue to be so for a while.

Thinks US banks, after 13-14 years of consolidating, are really attractive here. There is no doubt in his mind that he would want to be playing this. Although he thinks the US$ strengthens against the Cdn$, it feels like it is getting into the later innings. Hedging the Cdn$ is not a bad idea. This ETF is a great play on that.

Banks in the US are not a massive part of the economy. Equal weighted is not a bad way to manage the risk. It is not a bad place to be. People like the story of US banks and think it has a couple of years to go.

(A Top Pick Jan 30/15. Up .38%.) One of his cautionary notes on the market is that the US$ has run pretty hard. It has probably been a little overbought. He is just playing the sector for the next 2-3 months, and then he is out. The US banks tend to be in season and he thinks this will get to the top of its trading range, and maybe even break out by April or May, and then he will be gone.

He likes this. It gives you access to the US banks. The only concern he has had with US banking ETF’s, and why he has avoided them, is because of lawsuits. The number of lawsuits against the US banks has been huge, with monstrous fines being paid to regulators. That is not over yet.

(A Top Pick Dec 19/14. Down 10.7%.) He bought this because he has traded it before and knows its patterns very well. Had been absolutely sideways in 2014 and then started to break out. He tends to buy on breakouts. This should be strong through until April. Short-term traders could Buy it in here at around $18 mark and possibly sell it at around $22.