Taming the ETF Jungle

Are You ETF'd out?

There are so many ETF's out there that I've become dizzy reading prospectuses and delirious trying to design a mix. My initial wish-list consisted of 20 ETF's from various sources, including iShares, Claymore, and BMO with a few cool Horizon's beta choices for playing volatility and shorting downtrends. I realized that from a personal perspective this would be impossible to execute consistently and take far too much time. I wanted to design a core portfolio of ETF's some of which will be dividend producers, others which will be fixed income, and all that consist of good choices when balancing value, quality and health of companies held.

I decided to stray from the usual guru data on iShares ETF's which seem to be the most touted and focus on BMO. In comparing MER's across many of similar iShares and BMO offerings, BMO seemed to beat iShares on most equivalent funds.

Planning to Retire with Titans and Dogs!

The overall goal of this retirement portfolio is to have exposure to quality Canadian, US equity, and International equity from diverse sectors in addition to diverse fixed income sources, dividend sources and some emerging market exposure that would allow easy rebalancing and fit the retirement investment needs of a 40 something with about 20 years left to retirement.

Titans Meet Dogs Meet Income

Here is the gist of the portfolio:
ZCN: BMO Dow Jones Canada Titans 60 Index ETF 25%
ZDJ: BMO Dow Jones Industrial Average Hedged to CAD Index ETF 25%
ZGI: BMO Global Infrastructure Index ETF 25%
ZMI: BMO Monthly Income ETF 25%

ZCN: BMO Dow Jones Canada Titans 60 Index ETF: Portfolio Strategy: BMO Dow Jones Canada Titans 60 Index ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones Canada Titans 60 Index, net of expenses. The Fund invests in and holds the Constituent Securities of the Index in the same proportion as they are reflected in the Index.

Top Holdings:
Royal Bank of Canada    
Toronto-Dominion Bank              
Suncor Energy Inc.          
Bank of Nova Scotia       
Cdn Natural Resources Ltd          
Barrick Gold Corp.           
Potash Corp of Saskatchewan
Goldcorp Inc.    
Bank of Montreal            
Canadian National Railway          

Performance: One year:  MV/NAV   21.71%/22.18%    MER   0.15%

Sector exposure:  financials, energy, materials, industrials, telecommunications, consumer discretionary, information technology, consumer staples, utilities

Geographic: Canada

ZDJ: BMO Dow Jones Industrial Average Hedged to CAD Index ETF: Portfolio Strategy: The BMO Dow Jones Industrial Average Hedged to CAD Index ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones Industrial Average (CAD hedged), net of expenses. The Fund invests in and holds the Constituent Securities of the Index in the same proportion as they are reflected in the Index. The U.S. dollar currency exposure is hedged back to the Canadian dollar.

Top Holdings

IBM Corp.
Chevron Corporation
Caterpillar Inc
3M Company
Exxon Mobil Corp
United Technologies Corp

McDonald's Corp
Boeing Company
Coca-Cola Company
Procter & Gamble Company

Performance: MV/NAV 1 year 18.55%/19.33% MER 0.23%

Sector Exposure:  industrials, information technology, consumer staples, energy, financials, consumer discretionary, health care, materials, telecommunications

Geographic: US

ZGI: BMO Global Infrastructure Index ETF:Portfolio Strategy: BMO Global Infrastructure Index ETF has been designed to replicate, to the extent possible, the performance of the Dow Jones Brookfield Global Infrastructure Index, net of expenses. The Fund invests in and holds the Constituent Securities of the Index in the same proportion as they are reflected in the Index. The Manager may also use a sampling methodology in selecting investments for the Fund.

Top Holdings:

Hutchison Whampoa Usp ADR
National Grid plc ADR
TransCanada Corp
American Tower Corp
Enbridge Inc
Gpo Aeroportr Pafco ADR
Spectra Energy Corp
Keppel Corp Ltd, ADR
Consolidated Edison Inc
Sempra Energy

Performance: One year MV/NAV 18.66%/18.68% MER 0.55%

Sector exposure: utilities, industrials, energy, telecommunications

Geographic: US, Canada, Hong Kong, Brazil, Mexico, Singapore, UK, Netherlands, Greece

ZMI: BMO Monthly Income ETF: Portfolio Strategy: BMO Monthly Income ETF has been designed to deliver the performance of the underlying basket of higher yielding BMO ETFs. ETFs are selected by having a higher yield than either the equity market represented by the BMO Dow Jones Canada Titans 60 Index ETF (ZCN) or the fixed income market represented by the BMO Aggregate Bond Index ETF (ZAG). The holdings are weighted by yield, with 50 percent investment in each of equity and fixed income and a cap of 20 percent for each security with a range of 6 to 10 ETFs. The ETF is rebalanced quarterly and reconstituted semi-annually in June and December. In addition, as ZMI is a fund of fund, the management fees charged are reduced by those accrued in the underlying funds.

Holdings:
BMO Eq Wgt REITS ETF
BMO High Yield US ETF
BMO Eq Wgt Utilities ETF
BMO Emerg Mkt Bond ETF
BMO Cvd Call Cdn Bank ETF
BMO Mid Corp Bond ETF
BMO Long Corp Bond ETF
BMO Equal Wgt Banks ETF
BMO Short Corp Bond ETF
BMO Eq Wgt Oil & Gas ETF

Sector exposure: financials, corporate bonds, high yield bonds, utilities, emerging market bonds, energy

Geographic: Canada, US, emerging markets

No performance data available yet. MER: 0.55%

ZCM       25%
ZDJ         25%
ZGI         25%
ZMI        25%

Disclosure. I don't yet own these ETF's. Fifty percent of my savings is directed towards a sleepy portfolio such as this. Currently I have investments in TD-e series funds including the Canadian Index, US Dow Jones Industrial Index, International Index and Canadian Bond Index. Yawn!

Happy Investing!