BMO Low Volatility US Equity ETF

ZLU-T

No tech stocks, but low volatility with McDonald's and Waste Management. Utilities that pay dividends. Good for waiting and seeing how trade headlines plays out.

(A Top Pick July 26/17, Up 16%) Still likes it. Not that exciting, but good way to get diversified US exposure. Yield around 1.7%.

(A Top Pick October 7/16. Down 1%.) Not Cdn$ hedged which he regrets. If you are reasonably positive on US currency in the next 12 months, it should recover quite nicely. Has a good spread of very solid individual stocks. An easy way to get into part of the US market that is basically conservative, low volatility, but you are also exposed to the currency.

If you want to invest in the US, this would be his favourite vehicle. It has done quite well for him. It took quite a hit recently because of the stronger Cdn$, so the timing is pretty good. You are getting a participation in the market, but a part of the market that is not bouncing up and down. A good way to participate in the US market.

There has been a lot of talk about low volatility strategies over the past couple of years. That is great to have until it is not great to have. When you look at a lot of low volatility ETF’s, they are a bit expensive when looking at the names that are in them. He would rather go to something closer to the S&P 500, which has a little more growth involved, or looking at some of the International ETF’s.

(A Top Pick May 27/16. Up 10%.) He still likes this. It is a good safe way to tap into the US market, particularly if you are concerned about the Canadian situation.

(A Top Pick Dec 4/15. Up 7.70%.) He likes low volatility things. As the markets started to pick up, this tended to be a bit laggy. A nice core holding to have in your portfolio as he believes equity markets are going to be rising.

For investors who want a broad spectrum of the US markets. They are in the areas that are quite good, consumer staples, utilities, healthcare and consumer discretionary. A very safe kind of thing.

The low volatility holdings tend to be utilities, healthcare, tech, telecom, consumer staples and can also be mining stocks. Three of these sectors are underperforming the markets.

(A Top Pick July 31/15. Up 15.75%.) This has been one of his favourites for a while. It has a flexible portfolio in that they rebalance it once a year. It is not nearly as volatile as the market or individual securities can be.

This had a new high today. Thinks the US$ looks stronger and that the Fed is going to move at some point in time, which will mean a stronger US$. If you are nervous about markets, this is one of the best ways that you can get your toe in the water.

(A Top Pick May 22/15. Up 17.23%.) This is a way to get into the US. It has benefited from the low Cdn$.

Chart shows it has been going sideways, but that is at a time where the rest of the market was actually going down. Thinks it is back in a situation where we are going to see it going up. This is very much consumer oriented. They have 25% utilities, 24% consumer staples, 17% healthcare and 10% consumer discretionary.

Low volatilities have exploded ever since the launch of PWSH S&P 500 Low ETF (SPLV-N). BMO’s spin on this has been very good and has outperformed quite a lot with everyone wanting US$s. With the recent action in the Cdn$ going down, and the contemplation that the US$ could depreciate, BMO and many others launched currency hedged versions such as Low Volatility US Equity Hedged (ZLH-T). This is a call on whether you think the US$ is going to go up or down.

BMO has a great suite of ETF’s. This one has done very, very well. You can buy this and set it aside, and you are going to do well.

(A Top Pick Feb 18/15. Up 16.79%.) Has a lot of US retail, consumer durables, healthcare, etc. A domestically oriented low beta ETF. A part of the US economy that will do reasonably well and not be affected by the high US$.

Expense ratio is quite reasonable at 3.4%. It owns 26% utilities, 26% consumer staples, 19% healthcare and 11% consumer discretionary. Has a good distribution within the US economy. These are low volatility stocks.

This has very low volume and volume is very important. Technically ETF providers will tell you that the underlying benchmark or Index is key as to whether you can get liquidity in the market, from the standpoint of being able to redeem or create, but we are not in that market, so the next is the secondary market. He doesn’t Buy ETF’s that don’t trade actively every day.

Has $41,000. 3 ETF’s for growth and dividends to put into a TFSA account? This is a low volatility one from the US that he would suggest. Their concept on this is that you are buying stocks that have low beta.

This is a way to participate in a broad base. Their beta is .76. It has 25% utilities, 25% consumer staples, 20% in healthcare and 10.9% in consumer discretionary. These are companies that are not particularly multinationals, which is what he wants. Feels the high US$ has hurt some of the big multinationals. These tend to be more domestic.

Low volatility stocks have not done as well as some of the higher volatility stocks, which would typically be your momentum plays. Low volatility products have tended to underperform, which may continue for awhile. Until we get higher rates and more volatility that is when you want to be in this type of product.

Hasn’t done much recently, and is probably in a Buy range. They hold 25% utilities, 25% consumer staples, 20% healthcare and 12% consumer discretionary, so these are broad-based US companies towards the consumer side. Focused somewhat away from multinationals. Still thinks the US$ will continue to be strong. Good diversification.