Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Both John Hood and Larry Berman recommend the Bank of Montreal’s covered call ETF’s for their low volatility.

Jennifer Roberts/The Globe and Mail

With earnings season pretty much over and second-quarter profits priced into the stock market, we thought we'd undertake something of a midyear checkup, looking into top ETF picks positioned to perform well through the remainder of the year.

The ever-present risk of a destabilizing shock notwithstanding, the indicators mostly lend themselves to sustaining the bull market. The U.S. economy is perking up, inflation remains low, and interest-rate policy remains indefinitely accommodating, all of which bode well for stock prices.

So, with consideration given to how market and economic conditions have changed so far this year, we asked investment professionals for their current top ETF picks.

Story continues below advertisement

John Hood

President and portfolio manager of J.C. Hood Investment Counsel

1. Vanguard Large-Cap Index Fund ETF (VV)

This ETF gives investors exposure to a diversified group of U.S. large-cap companies, which have outperformed small and mid-cap stocks on an index basis so far this year. "The U.S. recovery is real, housing is up, higher paying jobs are increasing, manufacturing has strengthened and the U.S. is far less dependent on foreign oil," Mr. Hood said.

2. iShares Core S&P/TSX Composite High Dividend Index ETF (XEI)

Since iShares lowered its management expense ratios on many of its offerings, this ETF, with a projected MER of 0.22 per cent, is a more attractive way to getting exposure to income-producing equities, Mr. Hood said. "Given that fixed-income returns are so meagre, the only alternatives are to go longer term, higher default risk like junk bonds, or emerging market debt. No thanks."

3. BMO covered call ETFs (ZWB, ZWA, and ZWH)

Story continues below advertisement

"Covered calls do mitigate some market risk as the call premium reduces the price of the underlying security," Mr. Hood said, noting that, on the other hand, investors give up some of the upside reward with these kinds of ETFs. ZWB tracks Canadian banks, ZWA tracks Dow Jones industrial average companies, and ZWH tracks dividend-paying U.S. companies.

Larry Berman

Co-founder of ETF Capital Management

1. BMO U.S. High Dividend Covered Call ETF (ZWH)

As expectations are for modest stock market upside over the rest of the year, the premium earned on covered calls adds value and lowers volatility, Mr. Berman said. "This is a defensive holding with U.S. dollar exposure."

2. SPDR Barclays Short Term High Yield Bond ETF (SJNK)

Story continues below advertisement

The ticker is no coincidence as this ETF tracks U.S. high-yield junk bonds with a remaining maturity of less than five years. Mr. Berman said he likes this name as a diversifier. And while there is credit risk to consider, "I think rates will stay low for years," he said.

3. iShares Core MSCI Europe ETF (IEUR)

"Europe is undervalued – for a good reason – versus the U.S. market," Mr. Berman said. So focusing on high quality European companies is likely a good strategy over the next few years. This ETF also hedges against currency exposure.

John DeGoey

Vice-president and associate portfolio manager at BBSL

1. Vanguard FTSE All-World ex Canada Index (VXC)

Story continues below advertisement

For the domestic-minded Canadian, this is a TSX-listed ETF that invests anywhere but here. "This is a great product for minimizing home bias," Mr. DeGoey said.

2. iShares Global Agriculture Index ETF (COW)

Mr. DeGoey tends to focus on lifelong investing ideas and trends don't get much more long-term than the global demand for food. "Population is increasing, but farmland is decreasing," Mr. DeGoey said.

3. BMO Global Infrastructure Index ETF (ZGI)

Also on the list of lasting trends is the need for global infrastructure renewal, Mr. DeGoey said. "Roads, bridges, sewers and the like are crumbling the world over and need to be refurbished."

Globe app users please click here for table showing top ETF picks for the rest of 2014

Story continues below advertisement

Top ETF picks

ETFsTicker52-wk high ($)52-wk low ($)YTD price chg (%)1-yr price chg (%)
Vanguard Large-Cap Index Fund ETF *VV-N91.7475.008.0%20.3%
iShares Core S&P/TSX Composite High Dividend Index ETFXEI-T24.0020.2510.2%16.8%
BMO Covered Call Canadian Banks ETFZWB-T17.9214.9210.6%18.8%
BMO Covered Call Dow Jones Industrial Average Hedged to CAD ETFZWA-T19.7117.441.6%10.2%
BMO U.S. High Dividend Covered Call ETF **ZWH-T16.0915.095.7%N/A
SPDR Barclays Short Term High Yield Bond ETF *SJNK-N31.0630.09-1.1%0.3%
iShares Core MSCI Europe ETF * **IEUR-N50.5146.31-4.9%N/A
Vanguard FTSE All-World ex Canada Index ETF **VXC-T25.7924.782.7%N/A
iShares Global Agriculture Index ETFCOW-T29.9425.079.4%16.8%
BMO Global Infrastructure Index ETFZGI-T31.3223.1222.4%32.8%

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies