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BMO Equal Weight Utilities Index ETF (ZUT $26.63)
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BMO Low Volatility Canadian Equity ETF (ZLB $55.57)
Q: Retired, dividend-income investor. I have long term holdings in both ZLB and ZUT. Both are in registered accounts...no tax issues.
For asset allocation reasons, I am considering trimming ZUT and adding the proceeds to ZLB. When I use your charts and compare these two, ZLB appears to be the better performer over most timeframes.
Normally I would simply proceed, but this is a minor asset allocation tweaking. Also, I think that the BOC may be reducing interest rates this fall, which should have a positive impact on ZUT. Do you agree with this assumption?
Would you proceed or wait....I know this is a bit of a "market-timing" question?
Thanks for your help....Steve
For asset allocation reasons, I am considering trimming ZUT and adding the proceeds to ZLB. When I use your charts and compare these two, ZLB appears to be the better performer over most timeframes.
Normally I would simply proceed, but this is a minor asset allocation tweaking. Also, I think that the BOC may be reducing interest rates this fall, which should have a positive impact on ZUT. Do you agree with this assumption?
Would you proceed or wait....I know this is a bit of a "market-timing" question?
Thanks for your help....Steve
5i Research Answer:
We agree the Canadian rates are heading down and this should benefit utilities. But other sectors can and should benefit as well. ZLB, being much more diversified, has massively outperformed ZUT over five years (more than double). The decision here depends on current sector allocations and expectations for the market. If we had a diversified portfolio already and were not too worried about the market (we are not) we would not make this switch. If one wants a more-conservative stance and then it makes more sense. Without knowing these answers, we would go with the status quo.