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

(Top Pick Nov 5/13, Up 4.00%) A shorter term play for him. This will be a leader as the market continues its upward trend. He will hold until the spring.

Good ETF for Canadian banks? Worries about Canadian housing market were a little overdone. Cdn banks are not out of the woods. He is expecting some splits and a little bit of multiple expansion. Feels US banks are more attractive. There is a US bank fund hedged back to the Cdn$, BMO Equal Weight US Banks Hedged (ZUB-T) is interesting to him.

Comparing US banks to Canadian banks, the US ones were a little bit better on things like cash flow and earnings. They are coming from a very, very low level. 1.3% dividend yield.

US banks, from the valuation point of view, can be considered a little bit cheaper than Cdn banks, but also he is looking at this as an opportunistic play. It is a play on the US economy and is just now catching the lower trend line.

Likes it. Any dividend are interest rather than dividends for tax purposes. There are a lot of litigation issues in the US banking and they are putting aside a lot of money for that. They may have to beef up their reserves more than they want to. Be cautious and don’t go overboard.

The amount of money sitting in the banking system in the US today opens up a lot of potential. US banks are probably some of the strongest in the world because they have had so much money pumped into them. He likes the US banks and if he is going to be in the US economy, that is the safest place to be. The problem they are going to have is that if the regulations are kept the way they are, lending will be slowed down, which means there will be 2%-2.5% GDP nominal growth. That is not going to happen, and eventually US banks are going to take off. He prefers just buying Bank of America (BAC-N) stock.

Any kind of a product that gives you broad diversification in the US market is something he is going to like. Good product.

Likes the US financials right now because this particular ETF tends to hold some of the larger big bank financials in the US. Feels they have a lot of potential going forward for them.

Has had 5% of his portfolios in this since last summer. He likes equally weighted indexes. Still thinks it is doing reasonably well.

Likes the US banking space a lot. The only downside to this is that it is hedged to the Cdn$ and the US$ has moved up. You could also look at SPDR Financial ETF (XLF-N) which is US based and is not equal weighted. The advantage is that it is not hedged to the Cdn$.

US banks were cheap coming out of 2008-2009 but are now fairly priced.

He likes the US banks. In most cases they are somewhat cheaper than our banks. As the environment gets better in the US, it will help their banks.

Hedged so currency is not an issue. He generally does not worry about hedging. He has a 10-20 year time horizon. A hedge adds to your cost.

A pull back is a possiblity, but if you are looking 12 months out, you will be ok. Financials in the US are the #2 performing sector this year. With ZUB you are getting an equal weighted basket of banks. Another way to play it is XIF which is a "spide in the US" which is more market weighted.

He likes and owns both. Thinks they are undervalued to where they were 5 years ago.

Equal weight banks. Likes sector but has been holding off, concerned about litigation. A good sector with the recovering housing sector.