⭐ Start off 2025 with a powerful boost to your portfolio: January’s freshest AI-picked stocksUnlock stocks

Investing on BMO InvestorLine? Buy These BMO ETFs for a Diversified Portfolio

Published 12/20/2024, 11:55 AM
US500
1.26%
EFA
0.44%
SPTSECP3
0.70%

If you’re trading on BMO InvestorLine, here are a few BMO ETFs worth considering for a globally diversified portfolio.

BMO S&P 500 Index ETF (ZSP)

60% of the portfolio goes to ZSP, giving you instant access to 500 large-cap U.S. stocks screened for earnings quality via the S&P 500.

You probably know this index is notoriously hard to beat—SPIVA data shows that 88% of active funds underperform it over a 10-year period.

Currently, the S&P 500 has a heavy overweight to technology, followed by financials, consumer discretionary, and healthcare. Since it’s market-cap weighted, all of the Magnificent Seven stocks sit comfortably in the top 10 holdings.

Sector Allocation as of December 13, 2024, highlighting Information Technology (32.13%) as the largest sector, followed by Financials, Consumer Discretionary, and Health Care.

ZSP has delivered a 15.23% annualized total return over the last 10 years, boosted by a falling USD/CAD and rising US Dollar, as ZSP is unhedged. Keep in mind this performance already factors in the impact of the 15% foreign withholding tax on dividends.

BMO MSCI EAFE Index ETF (ZEA)

U.S. stocks have had a strong run, but they’re now quite expensive. If you want to diversify, it’s time to look internationally—which is why I’d allocate 30% to ZEA.

ZEA tracks the iShares MSCI EAFE ETF (NYSE:EFA), which stands for Europe, Australasia, and the Far East. It provides exposure to developed markets outside North America, including countries like Japan, the UK, France, Germany, and Australia.

Geographic Allocation as of December 13, 2024, showing Japan (22.94%), United Kingdom (14.57%), and France as the largest regions, along with smaller allocations across Europe and other countries.

Why ZEA? It shores up your non-North American exposure, holding 727 stocks across many developed markets. You get broad exposure to blue-chip financials, industrials, and healthcare companies, which are well-represented in the index.

Sector Allocation chart as of December 13, 2024, showing Financials (21.80%) and Industrials (17.78%) as top sectors, with significant diversity across other sectors.

The expense ratio is slightly higher at 0.22%, but that’s the price you pay for international diversification. It also comes with a decent 2.7% distribution yield, making it a solid option for income-oriented investors.

BMO S&P/TSX Capped Composite Index ETF (ZCN)

Finally, we’ll round out our portfolio by incorporating a bit of home country bias, with ZCN making up 10% of the portfolio. This allocation is still three times Canada’s actual weight in the MSCI World Index.

ZCN tracks the S&P/TSX Capped Composite, a benchmark of 221 market-cap-weighted holdings. The “capped” part ensures no single stock exceeds 10% of the index at each rebalance.

The fund provides the typical Canadian sector exposure that complements U.S. and international holdings well—namely, overweights to financials and energy.

Sector Allocation as of December 13, 2024, showing Financials (32.87%) and Energy (16.81%) as leading sectors, followed by Industrials and Materials.

The best part about ZCN? It’s incredibly cheap, with a 0.06% MER, and offers a decent 2.71% distribution yield, most of which comes from tax-efficient eligible dividends.

Putting the portfolio together

With 60% in ZSP, 30% in ZEA, and 10% in ZCN, you’re diversified across over 1,000 stocks spanning the U.S., Canada, and EAFE markets, with a weighted average expense ratio of 0.13%.

From January 2015 to November 2024, this simple, low-cost portfolio—rebalanced quarterly—would have earned you a 12.36% annualized total return, more than tripling an initial $10,000 investment. That’s a strong performance for doing nothing more than buying and holding three index ETFs.

Portfolio Growth chart showing steady balance growth from January 2015 to November 2024, ending at $31,772.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

Disclaimer: The information provided by ETF Portfolio Blueprint is for general informational purposes only. All information on the site is provided in good faith, however, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the site. Past performance is not indicative of future results. ETF Portfolio Blueprint does not offer investment advice, and readers are encouraged to do their own research (DYOR) before making any investment decisions.

Which stock should you buy in your very next trade?

AI computing powers are changing the stock market. Investing.com's ProPicks AI includes 6 winning stock portfolios chosen by our advanced AI. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. Which stock will be the next to soar?

Unlock ProPicks AI

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.