BMO Low Volatility Cdn Eqty ETF (ZLB.TO)

(A Top Pick May 28/14. Up 26.67%.) This has been a good holding. Going sideways lately, but still feels this is the kind of stock you want if markets are volatile and are concerned about the downside as much as the upside.

BMO’s low volatility, particularly their US one, has really outperformed the market and done very well. There are certainly some of his clients that he would look to buy this, but there is one thing that concerns him. When he looks at the BV they are very high and so are the price earnings ratios. He doesn’t like paying a really high price.

A lot of people don’t want to sell their securities in May and just go to cash. The summer is characterized by increasing volatility, so you want to go into low volatility securities. This one is made up of Canadian securities with a lower beta than the market. If the market rolls over and crashes, you are still going to get losses, but hopefully it will be less than the market.

An ETF with low volatility for a portfolio? The go to app for him has been this one. He would also accompany this with a US one if you can do so. On low volatility ETF’s, the underlying names are usually excellent, defensive, dividend paying and the kind of names you want. Also, you are not going to get bumped off because of volatility.

A low beta stock. (Beta measures the volatility of a stock versus the index.) What he likes is, if the index sells off by 5%-10%, this ETF doesn’t. Has a very nice upward momentum. He is thinking that 2015 is going to be quite volatile, so he wants to go for the conservative type investments.

Very steady. Good diversification. A lot of individual stocks in it. It works great. It might lag in a hot market. 2015 will be volatile and this is a safe place to park your money.

(A Top Pick Dec 12/13. Up 28.17%.) They have come up with a good formula. As a money manager, he always feels a little bit sensitive about buying a managed fund. This one really has worked and has been a great performer.

He doesn't normally use this. This is more of a value play, so it has a lower beta. It held up very well when the market started to tank in September. It is doing what it should be doing.

Had not looked at low volatility ETF’s because had thought they would be under-performers. However, this is not the case. They are good strong dividend players, and he’ll be looking at these further.

(A Top Pick Aug 12/13. Up 20.82%.) This is made up of low volatility stocks and the portfolio is readjusted on a regular basis. It seems that when this starts to sell off, buyers come in, which is why it is low volatility. These are stocks where there is always somebody waiting to buy them if they start to sell off.

Low beta stocks. Good history of performance. One of the better minimum volatility strategies out there.

(A Top Pick June 7/13. Up 18.38%.) Loves these broad-based ETFs. For an individual that has a relatively small account, you get great diversification, pretty reasonable performance, and they are the kind that you can buy and forget. Very low management fee of 0.35%.

One worry he had with low volatility ETFs, certainly through the summer of last year, was that it was one of the biggest inflows from the ETF industry from both Canada and the US. You get a little bit worried that there is too much money chasing something. This is a strategy that is really good for very, very long periods of time. A well-established idea. There have been studies showing that low volatility stocks can actually outperform high volatility ones. Where the math works is the idea of the compounding and the ability to have shallow declines in the market. Secondly, the anomaly works by the rebalancing of the 40 lowest names and reconstituting them 2 times a year. Great ETF to own in a TFSA or a small LIRA etc.

(Top Pick Dec 6/12, Up 24.15%) done very, very well with a beta below 1. Low volatility.

(His 3 Picks are all ETFs and a good way for the average investor to get into some part of the market with a fair amount of safety and diversification.) This one has performed quite well. This is diversification at a reasonable price. Not as volatile as the market.