BMO Equal Weight US Banks ETF (ZBK-T)

It holds the giant banks, now hitting all-time highs. It benefits from economic expansion, rising interest rates, and a new president that is more business-friendly.

He's held it in the past, not now. Banks have lagged for a long time, but now doing really well. The first phase of the upward swing was due to interest-sensitives doing better with lower interest rates. The second phase is driven by post-election hopes for deregulation and economy-friendly moves.

Despite being better diversified, US banking space can be more volatile than Canada's. Achieves more capital growth then an ETF with a covered call strategy. As well, consider some of the active options as offered, for example, from Hamilton.

Both good, but ZBK gives US dollar exposure.

The US bank sector of course has had a tough year, and the outlook will largely depend on the economy and rates. However, the fund now has an average P/E of 5.5X and an indicated yield of 3.49%. We think this is cheap enough that investors can slowly start buying the sector now. 
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Higher rates can be good for the financial sector. 
The main concern is whether rates push us into recession. 
Certainly a possibility, but right now the economy is much stronger than most expected, and thus banks should be OK for a while. 
At some point, the narrative is going to shift from higher rates to corporate earnings, and corporate earnings have been OK. 
ZBK we think can be held, but like any equity is not risk-free. 
We think holders should have at least an 18 month timeframe here.  
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He wouldn't buy the covered call. If you like American banks, buy them individually. He would rather buy ZBK which is a play on American banks without a covered call. Basically, you're paying a premium for covered calls..

US Banks. He still does not love them, but for the first time last week he exposed himself to a currency hedged version because it has currency exposure. It was a small bet because some small relative value is developing.

This is a way to play rising interest rates. Banks generate profit with interest spreads. This is a good tactical play. It could be a good hedge.