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Opinions Larry Berman CFA, CMT, CTA
BMO S&P/TSX Oil & Gas ETFZEO.TOBUYOct 27, 2014
$14.09
Stock price when the opinion was issued
$102.89
As of Jun 19, 2026. Market Open.
E.T.F.'s
It's the ideal tool to help you make quicker, more informed decisions for managing and tracking your investments.
You might be interested:
PAST TOP PICK
(A Top Pick Jan 24/23, Up 5%)
Energy shares struggling first half of 2023.
Not a good pattern for investors.
Has sold shares.
Brooke ThackrayOwned
E.T.F.'s
BUY
oil There's underproduction of oil and supply constraints. Also, US oil reserves were drained before their elections and now needs to be filled whenever oil dips to $70. So, oil has a floor and there remains demand. A good sector to own, especially if China opens next spring. XEG holds Canadian oil stocks, and is market-cap weighted, including CNQ, Suncor and Cenovus among its top holding. ZEO is an equal-weight, so offers a little more diversity. And HXE is the cap-weighted ETF like XEG, but it doesn't pay a dividend. So this is good outside an RRSP. For midcap oil, look at NNRG, but charges a higher MER. It depends on your tax preference and the contents of each ETF.
E.T.F.'s
WEAK BUY
Energy ETF Commodities are sensitive to the cycle: warning. Suggests XEG or HXE, both market-cap weighted in oil producers, but they are dominated by Suncor and CNQ (over 50% of these ETFs). For more diversification, look at equal-weighted ZEO-T. But he prefers HUC-T because it gives you commodity--and not commodity stock--exposure. For all of these, be very, very careful--there could be severe drawdowns in energy if the economy falters in the next 12 months.
E.T.F.'s
SELL ON STRENGTH
The way to trade energy is XEG which is market cap weighted. ZEO is equal weights. He has been selling into strength right now though.
Larry Berman CFA, CMT, CTAUnknown
E.T.F.'s
PARTIAL BUY
An equal weight to play the canadian energy sector. Long term he is not bullish but in the medium term, there is underinvestment in energy and this should keep oil elevated. Until OPEC opens the flood gates, it is a good way to play the energy space on an equal weights basis. Trade this name.
E.T.F.'s
COMMENT
Challenge with buying US ETFs that participate in MLPs is that they're not favourable to a Canadian investor. Withholding tax of 15-30%. Be very, very careful on the MLPs. If you want gas exposure, think about XEG or ZEO. Most bang for the buck would be the HED, with small cap exposure. Small caps have more operating leverage if you're confident gas prices will rise. HOG is a bit more conservative.
E.T.F.'s
PAST TOP PICK
(A Top Pick Nov 23/17, Down 14%) Canadian oil has been beaten up since Nov. 2017. Oil investors are frustrated. ZEO is equal-weighted, so it's biased towards mid-caps.
Daniel StrausOwned
E.T.F.'s
COMMENT
ZEO-T vs XEG-T ETF – The difference between these two is concentration. The XEG is dominated 50% between CNQ-T and SU-T. In the equal weight portfolio (ZEO) these represent only 17%. There is a higher yield with XEG.
Mike PhilbrickUnknown
E.T.F.'s
Yields 3.4% and on a risk adjusted basis, and you get a better quality dividend than the banks. It is one of the largest holdings he has. It is getting very attractive on a relative basis. It is a global dividend seeking fund. There will be increased volatility for the next year or so.