In this post, we’ll go over the best growth ETFs offered by BMO. Our analysis focuses on long-term performance. Only ETFs with a sustained historical performance over a period of 5 years were considered. For each ETF, we will analyze strategy, performance, management fees and volatility.
Management Fees and Volatility
| Name | MER* | Beta* |
| ZQQ – BMO Nasdaq 100 Hedged To CAD Index | 0.39 | 1.28 |
| ZUQ – BMO MSCI USA High Quality Index | 0.33 | 0.92 |
| ZGQ – BMO MSCI All Cntry Wrld High Qlty | 0.45 | 0.90 |
| ZID – BMO India Equity Index ETF | 0.72 | 1.24 |
| ZBK – BMO Equal Weight US Bank ETF | 0.35 | 1.47 |
| ZSP-U – BMO S&P 500 Index ETF USD | 0.09 | 0.95 |
| ZSP – BMO S&P 500 Index ETF (CAD) | 0.09 | 0.98 |
Source: TD Market research , MER: Management expense ratio is the total charges charged by the fund including administration and management fees. Beta (60 months): is a measure of volatility. The higher the Beta, the more risky the title. A Beta of 1 means the stock has the same volatility as the market.
Performance Comparison
Updated daily
Analysis (Best ETF Canada by BMO):
BMO’s Best Equity ETFs highlight ZQQ (BMO Nasdaq 100 Equity) as the top performer over the last decade, primarily attributed to the dominance of FAANG stocks (Facebook, Amazon, Apple, Netflix, and Google), which collectively constitute nearly a third of the Nasdaq 100. ZQQ boasts the highest annualized average performance over a 5-year span, coupled with a modest volatility of 1.28. This makes ZQQ particularly attractive for long-term investors seeking a well-performing portfolio of high-quality securities with substantial growth potential. Notably, ZQQ provides excellent exposure to the technology sector in its sector allocation.
ZQQ has assets under management of $ 1.57 billion. It is one of the most popular funds in Canada.
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ZUQ (BMO MSCI US High Quality) and ZGQ (BMO MSCI World High Quality) have showcased strong performances, sharing a common stock selection methodology. Unlike traditional index replication, these funds implement a pre-selection process, specifically choosing securities based on criteria related to yield and liquidity. Both ZUQ and ZGQ are well-suited for long-term equity investments, offering diversified portfolios. Their risk/return ratio is attractive, marked by a Beta of less than 1.
ZSP and ZSP-U (BMO S&P 500 Index ETF) emerge as the top choices for investors seeking low-cost index funds. Tracking the S&P 500 Index, a robust representation of the US economy, these ETFs stand out for their minimal management fees. ZSP is unhedged against currency risk, while ZSP-U is exclusively purchasable in US dollars. The decision between hedged, unhedged, or US dollar funds hinges on individual expectations regarding exchange rates, with long-term impacts on exchange losses or gains typically proving minimal.
ZBK (BMO Equal Weight US Banks) provides exposure to the US banking sector, albeit with a Beta of 1.47 over the past 5 years, indicating a volatility level almost one and a half times higher than the market. With assets under management totaling $880 million, ZBK remains a significant player in this segment.
ZID (BMO Indian Equities) focuses on Indian companies, offering a valuable avenue for diversification within an existing portfolio by tapping into the potential of a promising emerging market. While relatively smaller in size with $107 million in assets under management, ZID provides investors with exposure to the opportunities presented by the Indian market.
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ZQQ – BMO Nasdaq 100 Hedged To CAD Index ETF
ZQQ Strategy
BMO Nasdaq 100 Equity Hedged to CAD seeks to replicate, to the extent possible, the performance of an index of securities of companies listed on the NASDAQ, net of expenses. ZQQ ranks first in our ranking of the best BMO ETFs to hold for long term.
The ZQQ is hedged for currency risk.
The Nasdaq-100 is one of the world’s leading large-cap growth indices. It includes 100 of the largest national and international non-financial companies listed on the Nasdaq by market capitalization.
This index is dominated by companies in the technology sector.
47.93% Technology
19.77% Communications Services
18.25% Consumer Discretionary
ZQQ Morningstar rating
(Source: TD Market research)
ZQQ Holdings
| Weight (%) | Name |
| 10,52% | APPLE INC |
| 9,47% | MICROSOFT CORP |
| 8,17% | AMAZON.COM INC |
| 3,98% | ALPHABET INC |
| 3,97% | FACEBOOK INC |
| 3,73% | TESLA INC |
| 3,56% | ALPHABET INC |
| 3,08% | NVIDIA CORP |
| 2,33% | PAYPAL HOLDINGS INC |
| 2,00% | COMCAST CORP |
ZUQ – BMO MSCI USA High Quality Index
ZUQ strategy and sector allocation
The BMO MSCI USA High Quality seeks to replicate, to the extent possible, the performance of the MSCI USA Quality Index, net of expenses. The index is 100% invested in the United States.
The fund selects the securities according to the criteria below:
• Large or medium-sized business;
• High return on equity;
• Sustained growth in revenues;
• Low debt ratio
ZUQ Sector allocation – Top 3
45.83% Technology
20.49% Healthcare
10.80% Communication service
ZUQ Morningstar rating
(Source: TD Market research)
ZUQ Holdings
| Weight (%) | Name |
| 5,11% | FACEBOOK INC |
| 5,00% | MICROSOFT CORP |
| 4,84% | APPLE INC |
| 4,50% | JOHNSON & JOHNSON |
| 4,01% | MASTERCARD INC |
| 3,87% | NVIDIA CORP |
| 3,80% | VISA INC |
| 3,74% | UNITEDHEALTH GROUP INC |
| 2,71% | PAYPAL HOLDINGS INC |
| 2,71% | ADOBE INC |
ZGQ – BMO MSCI All Cntry Wrld High Qlty ETF
ZGQ Strategy and sector allocation
The BMO MSCI World High Quality ETF seeks to replicate, to the extent possible, the performance of the MSCI All Country World High Quality Index, net of expenses. ZGQ is a global ETF. While ZUQ invests mainly in the American market.
The fund selects the securities according to the criteria below:
• Large or medium-sized business;
• High return on equity;
• Sustained growth in revenues;
• Low debt ratio
ZGQ Geographical breakdown of the Top 5 portfolio
68.32% United States
5.35% Switzerland
3.91% Taiwan
3.42% United Kingdom
3.38% China
ZGQ Sector allocation – Top 3
38.95% Technology
15.57% Healthcare
13.38% Communication service
ZGQ Morningstar rating
(Source: TD Market research)
ZGQ Holdings
| Weight (%) | Name |
| 5,16% | MICROSOFT CORP |
| 5,00% | APPLE INC |
| 4,57% | FACEBOOK INC |
| 3,31% | TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD |
| 2,78% | JOHNSON & JOHNSON |
| 2,65% | ALPHABET INC |
| 2,59% | ALPHABET INC |
| 2,36% | VISA INC |
| 2,32% | NVIDIA CORP |
| 2,23% | TENCENT HOLDINGS LTD |
ZID – BMO India Equity Index
ZID Strategy and sector allocation
The BMO Indian Equity ETF provides exposure to the Indian market which is one of the most promising emerging markets. The fund acquires certificates (ADRs) from major Indian companies listed on the Toronto, London and New York stock exchanges (NYSE and NASDAQ).
ZID sector allocation – Top 3
45.20% Financial Services
20.62% Technology
14.39% Energy
ZID Holdings
| Weight (%) | Name |
| 15,64% | ICICI BANK LTD |
| 15,53% | INFOSYS LTD |
| 14,39% | RELIANCE INDUSTRIES LTD |
| 13,82% | HDFC BANK LTD |
| 8,50% | LARSEN & TOUBRO LTD |
| 8,02% | AXIS BANK LTD |
| 7,72% | STATE BANK OF INDIA |
| 3,92% | WIPRO LTD |
| 3,91% | MAHINDRA & MAHINDRA LTD |
| 3,01% | DR REDDY’S LABORATORIES LTD |
ZBK – BMO Equal Weight US Bank
ZBK STtrategy
The BMO Equal Weight US Banks ETF has been designed to replicate, to the extent possible, the performance of the Solactive Equal Weight US Bank Index, net of expenses. The Fund invests and holds the constituent securities of the index in the same proportion as that reflected in the index.
ZBK’s sector allocation is 100% in the financial sector.
ZBK Holdings
| Weight (%) | Name |
| 5,49% | WELLS FARGO & CO |
| 5,41% | AMERIPRISE FINANCIAL INC |
| 5,25% | BANK OF AMERICA CORP |
| 5,22% | US BANCORP |
| 5,16% | FIRST REPUBLIC BANK/CA |
| 5,15% | CITIZENS FINANCIAL GROUP INC |
| 5,08% | KEYCORP |
| 5,06% | FIFTH THIRD BANCORP |
| 5,04% | PNC FINANCIAL SERVICES GROUP INC/THE |
| 5,03% | REGIONS FINANCIAL CORP |
ZSP-U et ZSP – BMO S&P 500 Index ETF
ZSP Strategy
The BMO S&P 500 ETF seeks to replicate, to the extent possible, the performance of the S&P 500 Index, net of expenses. ZSP invests in the constituent securities of the index and holds these securities in a proportion equal to that which they represent in the index.
ZSP-U is a Canadian ETF however it only trades in US $.
ZSP is a Canadian ETF that trades in Canadian $ and is not hedged against currency risk.
ZSP-U vs ZSP which one to choose
If you are uncertain between a hedged, unhedged or US $ ETF, please refer to the table below:
Scenario 1: Value of Canadian $ appreciated | Scenario 2: Value of Canadian $ depreciated | |
| Non hedged ETF | Index return Minus foreign exchange loss | Index return Plus foreign exchange gains |
| Hedged ETF | Index return | Index return |
| US $ ETF | Index Return The investor chooses when to convert | Index Return The investor chooses when to convert |
S.P. 500 Index
The S&P 500 Index, or the Standard & Poor’s 500 Index, is a market-capitalization-weighted index of the 500 largest publicly-traded companies in the U.S.
The S&P 500 is an excellent index because most of its constituents are large established US corporations. It’s well diversified across various sectors of the US economy. The index is widely regarded as the best gauge of large-cap U.S. equities. It can be easily used to express an opinion on the US economy in general. In other words, if you are bullish on the performance of the American economy in the long term, it’s probably the best index for you.
ZSP-U Portefeuille
| Weight (%) | Name | Sector |
|---|---|---|
| 5.98% | APPLE INC | Information Technology |
| 5.54% | MICROSOFT CORP | Information Technology |
| 2.30% | AMAZON.COM INC | Consumer Discretionary |
| 1.73% | BERKSHIRE HATHAWAY INC | Financials |
| 1.63% | ALPHABET INC | Communication Services |
| 1.57% | UNITEDHEALTH GROUP INC | Health Care |
| 1.46% | JOHNSON & JOHNSON | Health Care |
| 1.45% | ALPHABET INC | Communication Services |
| 1.42% | EXXON MOBIL CORP | Energy |
| 1.23% | JPMORGAN CHASE & CO | Financials |
BMO investorline review
BMO Bank of Montreal offers a wide variety of different ETFs. It is in fact one of the largest issuers of exchange-traded funds in Canada. BMO’s brokerage service is offered under the BMO InvestorLine.
According to the Milliondollarjourney website, BMO investorline offers several advantages:
BMO investorline pros
• Best broker / bank;
• One of the best brokerage platform;
• App on phone is one of the best in the market;
• BMO is a major bank in Canada;
• Multiple resources to educate clients;
BMO investorline Cons
• Relatively high transaction costs compared to online brokers such as Questrade and Qtrade
