It charges a high 62 basis points, which is nuts. But it does access the Canadian banks. This should be 15 basis points tops. He still likes it though.

It holds Canadian banks on an equal weight approach. If you have a small amount of investment capital (around $20,000 or more), he would suggest buying the individual banks yourself through a discount broker to avoid the fee with the ETF as the fund only holds 5-7 stocks.

ETF versus buying bank stocks. Canada banks as a whole should continue to perform well. Regulatory testing on mortgages will be a headwind. Bank stocks generally trade at two times book value (which is relatively cheap) and the return on equity is better than the US. When interest rates rise they earn more. He thinks Royal (RY-T) and TD (TD-T) are best in class assets.   

This is a seasonal period for the banks. In the past, when there has been a run-up and outperformance in the market in the summer, it has actually peaked in December. If you see a strong bounce and outperformance in Sept/Oct and Nov, earnings have to be really good. Investors want to be there for Q4 earnings, because that is where most stock splits and dividend increases occur. If there is a little bit of weakness, even on good earnings, that might be a time to lighten up.

This ETF or individual banks?Seasonal patterns tell us that we are likely going to have strong markets in the last few months of the year. This ETF allows you to purchase a basket of the 6 Canadian banks, which gives you an equal weight in one shot. You are paying 62 basis points, but it does give you a diversified mix. You might want to consider the BMO Equal Weight US Banks (ZBK-T), which he likes for its leverage. Interest rates are moving higher and faster in the US, in an economy that is a little more on solid footing going forward. Canadian banks are fairly valued at this point but there is still runway for growth.