Larry Berman CFA, CMT, CTA BMO US Dividend Hedged to CAD ZUD-T DON'T BUY Oct 24, 2016

This dividend ETF looks interesting in terms of its components. Has been attracting a lot of fund flows.

US dividend stocks? There are a couple of different ways to play this. You could do this through and equally weighted diversified basket of ETF dividend payers like this one. He would go with a hedged version. If things are going to recover, the Cdn$ is going to get a bit stronger, and you want to make sure you are hedged.

US Dividend Hedged to Canadian dollars. When you buy a hedged product, you are making a call on the currency. You should hedge unless you feel strongly the US dollar will go up or you are trying to create a diverse basket of foreign currencies. Right now he would buy this hedged version.

ZDY-T vs. ZUD-T. They are identical holdings. ZUD-T has a currency hedge. He buys ZDY-T to get exposure to the US dollar as well as US dividends. If he thinks the CAD$ will get stronger, he trades to ZUD-T. You can also get ZDY.U-T to buy it in US$.