BMO EQL WGT US BANK HDGD TO CAD IDX ETF (ZUB.TO)

Seasonally banks do okay until around June-July, and then fade out. Chart shows that it broke down through the trendline, but just because it breaks the trendline doesn’t mean it is game over. It is now trying to consolidate. If it breaks out, he will be buying this again.

BMO Eq Wt US Banks Hedged CAD (ZUB-T) or BMO Equal Weight US Banks (ZBK-T)? Thinks the US banks will probably do pretty good here. US housing is still increasing and US banks is a great way to play that. ZUB would definitely be the way to play it. Regarding hedging, trying to predict currencies is darn near impossible.

This is hedged to the Cdn$ and he is indifferent as to hedges. He likes US banks. They have done very, very well in the past 5 years. Equal weight is probably a good simple intuitive way of being able to play that sector.

We’ve already seen 4% off the highs. If we are going to see 10% in this correction, he would look to buy 5-8% less than it is today. Dividends in the US banks are not high.

Likes the US banks and he might leave this one for a while. When you have short-term interest rates so low and bonds in a very steep yield curve, that is very good for banks and earnings. Also, if you think there is going to be a good housing market in the US, there should be some loan and mortgage growth.

US equal weight bank product. A hedged product, low cost. He heard that BMO will come out with an unhedged version in the near future (ZBK-T). He tends not to play sectors but if you want to, this is an excellent product.

XLF-N or ZUB-T for a rising US$? Feels the Cdn$ is going to outperform the US$ next year. Canada will benefit from a stronger US economy. If you are looking for a rising US$, the choice would be ZUB, but he is not expecting a rise in the US$. As this is hedged to the Cdn$, you are not going to get any benefit by buying US banks, you might as well just go Buy a US-based ETF that trades on the NYS.

(A Top Pick Jan 9/13. 28.52%.) These are mostly regional banks. This was a no-brainer. We had the issue of home building in the US and it was an area that was poised to make a big move. Still likes.

(Top Pick Nov 5/13, Up 4.00%) A shorter term play for him. This will be a leader as the market continues its upward trend. He will hold until the spring.

Good ETF for Canadian banks? Worries about Canadian housing market were a little overdone. Cdn banks are not out of the woods. He is expecting some splits and a little bit of multiple expansion. Feels US banks are more attractive. There is a US bank fund hedged back to the Cdn$, BMO Equal Weight US Banks Hedged (ZUB-T) is interesting to him.

Comparing US banks to Canadian banks, the US ones were a little bit better on things like cash flow and earnings. They are coming from a very, very low level. 1.3% dividend yield.

US banks, from the valuation point of view, can be considered a little bit cheaper than Cdn banks, but also he is looking at this as an opportunistic play. It is a play on the US economy and is just now catching the lower trend line.

Likes it. Any dividend are interest rather than dividends for tax purposes. There are a lot of litigation issues in the US banking and they are putting aside a lot of money for that. They may have to beef up their reserves more than they want to. Be cautious and don’t go overboard.

The amount of money sitting in the banking system in the US today opens up a lot of potential. US banks are probably some of the strongest in the world because they have had so much money pumped into them. He likes the US banks and if he is going to be in the US economy, that is the safest place to be. The problem they are going to have is that if the regulations are kept the way they are, lending will be slowed down, which means there will be 2%-2.5% GDP nominal growth. That is not going to happen, and eventually US banks are going to take off. He prefers just buying Bank of America (BAC-N) stock.

Any kind of a product that gives you broad diversification in the US market is something he is going to like. Good product.