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3 top picks from J.C. Hood Investment’s John Hood

John Hood is president and portfolio manager of J.C. Hood Investment Counsel. His focus is on options and ETFs.

Top picks:

Vanguard S&P 500 Index ETF (CAD hedged)
I have been continually bullish on the U.S. markets with an asset mix of 20- to 25-per-cent U.S. stocks.

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Vanguard MSCI Emerging Markets Index ETF
I also like Vanguard's VEE Emerging Markets because of Vanguard's lower costs but I only allocate 5 to 10 per cent to sectors/emerging markets.

BMO Covered Call Canadian Banks ETF
ZWB offers strong after-tax yields because it adds to the dividend of Canadian banks. Returns, however, are hitched to these banks.

Past picks: Dec. 15, 2012

iShares S&P 500 Index Fund (CAD hedged)
Then: $14.31
Now: $16.16
Total return: +16.06 per cent

iShares S&P/TSX 60 Index Fund
Then: $16.78
Now: $17.94
Total return: +10.55 per cent

BMO S&P/TSX Equal Weight Global Metals (CAD hedged)
Then: $15.29
Now: $13.38
Total return: –10.88 per cent

Total return average: +5.27 per cent

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Market outlook:

I have been continually bullish on the U.S. markets with about a 20- to 25-per-cent asset allocation. It's important to remember that we are buying U.S. businesses through ETFs, not the U.S. economy, and that U.S. business is well capitalized and profitable. The S&P 500 was up 15 per cent last year.

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