John Hood, President and Portfolio Manager, J.C. Hood Investment Counsel

FOCUS: Options & ETFs

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MARKET OUTLOOK:

I continue to favour the U.S. market in that while returns have been sluggish, I believe they will begin to accelerate. Low oil prices and interest rates will continue to benefit consumers and business. The only possible blight on the horizon is the uncertainty created by the most bizarre presidential election since the Chicago and Miami conventions in 1968. However, my U.S. positions have been in place for some time and I have no intention of fleeing for the exits - not yet at least.

Top Picks:

SPDR S&P 500 ETF Trust (SPY)

SPY is the largest ETF in USD. Although at record highs it should continue to climb as the economic recovery accelerates.

BMO EQL WGT US BANK HDGD TO CAD IDX ETF (ZUB.TO)

ZUB is BMOs equal weight U.S. banks ETF hedged to the Canadian dollar. U.S. banks have lagged the market in the wake of unrelenting lawsuits and trading/capital restrictions and of course low interest rates reducing net interest margins but I believe this will change as the U.S. market recovers.

BMO SP TSX EQL WEIGHT OIL GAS INDEX ETF (ZEO.TO)

I am not rushing to buy this, much like recommendations earlier this year on XGD (golds) and ZMT (base metals) I am looking for a trading opportunity. Most clients already hold energy in their broadly based Canadian ETFs. Further near term weakness would not be surprising.

Disclosures: I have not purchased any of these ETFs currently in any accounts although I hold equivalents eg. Vanguards S&P VV  and I have ZEO at $10.23 from several years ago.

Disclosure Personal Family Portfolio/Fund
 SPY N N  N 
 ZUB N  N  N 
 ZEO N  N  N 

 Past Picks:  August 7, 2015

iShares Edge MSCI Canada Minimum Volatility Index ETF (XMV.TO)

  • Then: $26.24
  • Now: $27.85
  • Return: +6.13%
  • TR: +9.05%

Horizons Active Floating Rate Bond ETF (HFR.TO)

  • Then: $10.06
  • Now: $9.98
  • Return: -0.80%
  • TR: +1.20%

Horizons S&P 500 Index ETF (HXS.TO)

  • Then: $49.11
  • Now: $51.62
  • Return: +5.11%
  • TR: +5.11%

Total Return Average: +5.12%

Disclosure Personal Family Portfolio/Fund
XMV Y Y Y
HFR Y Y Y
HXS Y Y Y

Website: www.jchood.com