John Hood is president and portfolio manager of J.C. Hood Investment Counsel. His focus is ETFs and options.
iShares Core S&P 500 Index ETF (XSP-T)
I continue to like iShares Core S&P 500 Index ETF, the U.S. large cap ETF which is hedged against a decline in the U.S. dollar relative to the Canadian dollar. I bought this as a core holding including family and personal accounts at very diverse price.
BMO MSCI EAFE Hedged to CAD Index ETF (ZDM-T)
The BMO MSCI EAFE Hedged to CAD Index ETF includes both Europe and approximately 20 per cent Japan. I have been buying a little but was waiting for the results of the U.K. election. It will be bought in client, and family accounts shortly.
RBC Target 2017 Corporate Bond Index ETF (RQE-T)
I'm looking to buy RBC Target Maturity bonds as alternative to other bond ETFs to avoid rate risk. No yield advantage over others RQD 2017.
Past Picks: May 16, 2014
Vanguard Large-Cap ETF (VV-N)
Then: $86.35; Now: $97.36 +12.75%; Total return: +14.86%
iShares S&P/TSX Capped Composite Index ETF (XIC-T)
Then: $22.98; Now: $24.07 +4.74%; Total return: +7.47%
Vanguard FTSE Europe ETF (VGK-N)
VGK at 54-55 last November (bought at 53-54) because I was concerned about a decline in the EURO and the ETF had disappointing performance
Then: $60.34; Now: $57.56 -4.61%; Total return: -1.49%
Total return average: +6.95%
Throughout the year, investors have been waiting for the other shoe to drop, i.e. for the market to correct 10-20 per cent. But, every time the market trembles – e.g. earlier this week on the trade deficit – it surged back. Much like on today's bullish jobs report. One view is that the economy is slow, which is true, and that markets are overvalued and vulnerable. Another outlook is that Q1-2 was weak because of a harsh winter and the port strike but markets are continuing to heal. So let's step back a little. While the trade deficit sent markets gagging, the U.S. dollar has dropped about 5 per cent which is beneficial to exports and there is now quantitative easing in Europe to stimulate growth. This should benefit large cap U.S. multinationals. Further the U.S. is awash in cheap oil, rates remain low and unemployment continues to fall. So when's the correction coming? Soon, I hope because I have a lot of cash that I want to invest in the U.S. Volatility shouldn't be feared, it's an opportunity.