Top 6 U.S. Equity ETF Ideas That Could Benefit from Falling Rates and Potential Trump Rally
Nov. 12, 2024
Will the U.S Federal Reserve cut rates through 2025? Will the election of Donald Trump back to the U.S. presidency fuel U.S. equity markets?
For investors who foresee interest rates moving lower next year combined with the potential for a Trump “bump” in stocks, here are six prudent ways to get exposure to U.S. equities.
BMO MSCI USA High Quality Index ETF (Tickers: ZUQ/ZUQ.F/ZUQ.U)
- This core solution provides exposure to high-quality growth companies — defined as market leaders with durable business models and sustainable competitive advantages.
- A well-diversified basket of blue-chip companies with the potential for greater long-term growth and less volatility than the broad market over time.
- Companies typically have high return on equity (ROE), stable earnings across changing business cycles, and strong balance sheets with low financial leverage.
BMO S&P US Small Cap Index ETF (Tickers: ZSML/ZSML.F/ZSML.U)
- When central banks lower rates, the profitability potential of small cap companies tends to go up, as they often have more liabilities and carry higher interest costs to fund their day-to-day operations.
- ZSML tracks the S&P SmallCap 600® Index, which has profitability criteria built in the stock inclusion process.
- Stocks are screened by the underlying index for a positive net income on a trailing 12-month and most recent quarter basis, filtering out certain risks associated with small cap companies.
BMO S&P 500 Index ETF (Tickers: ZSP/ZUE/ZSP.U)
- Utilized as a core building block to a portfolio and is one of the largest most liquid ETFs in Canada.1
- The S&P 500 is considered one of the most cost efficient and resilient indexes in the world with an excellent track record.
- With a 30% allocation to the Technology sector,2 investors can capitalize on innovation stocks in the U.S with the diversification support of the largest companies in the world.
BMO Nasdaq 100 Equity Index ETF (Tickers: ZNQ/ZQQ/ZNQ.U)
- An exposure to a basket of the 100 largest non-financial listings on the NASDAQ.
- The index is led by mature companies with a proven track record of growing earnings, well-capitalized balance sheets and compelling competitive advantages.
- Consider the Nasdaq 100 Index for global diversification as this U.S. index receives approximately 43% of its sales from international sources of revenue.3
BMO Covered Call Technology ETF (Ticker: ZWT)
- Add the potential alpha and cashflow to your portfolio and gain access to a diversified basket of large-cap North American Information Technology/Technology-related companies with a covered call overlay to generate additional yield on top of dividends.
- Capitalizes on several emerging opportunities, including generative AI, cloud computing, and semiconductor growth.
- This portfolio provides emphasis on high-quality, large-cap technology names to enhance the overall stability and risk profile of the ETF while still providing an attractive yield boost relative to the technology index.
BMO Low Volatility US Equity ETF (Tickers: ZLU/ZLU.U/ZLH)
- Well diversified solution that uses beta4 as the primary investment selection and weighting criteria. Low beta investments are less volatile than the broad market and can be considered defensive investments.
- Over the long-term, low beta stocks may benefit from smaller declines during market corrections and still increase during advancing markets, providing the potential for stable and predictable returns.
- Low beta stocks tend to be more mature and provide higher dividend yields than the broad market, which can act as a cushion to market fluctuations.
*Performance:
Fund Name |
Ticker |
1-Year |
3-Year |
5-Year |
10-Year |
Since Inception |
Inception Date |
BMO S&P US Small Cap Index ETF |
29.94% |
5.51% |
- |
- |
8.94% |
February 05, 2020 |
|
BMO S&P US Small Cap Index ETF (Hedged Units) |
27.66% |
0.32% |
- |
- |
6.22% |
February 05, 2020 |
|
BMO S&P US Small Cap Index ETF (USD Units) |
29.42% |
1.45% |
- |
- |
7.88% |
February 05, 2020 |
|
BMO Covered Call Technology ETF |
50.81% |
17.06% |
- |
- |
18.67% |
January 20, 2021 |
|
BMO NASDAQ 100 Equity Index ETF |
39.05% |
12.56% |
21.45% |
- |
21.46% |
February 15, 2019 |
|
BMO NASDAQ 100 Equity Hedged to CAD Index ETF |
36.81% |
6.96% |
18.72% |
16.39% |
16.97% |
January 19, 2010 |
|
BMO Nasdaq 100 Equity Index ETF (USD Units) |
38.49% |
8.22% |
- |
- |
10.80% |
February 12, 2021 |
|
BMO Low Volatility US Equity ETF |
24.06% |
11.61% |
9.78% |
11.97% |
13.99% |
March 19, 2013 |
|
BMO Low Volatility US Equity ETF (USD Units) |
23.56% |
7.31% |
8.56% |
9.63% |
11.05% |
March 19, 2013 |
|
BMO Low Volatility US Equity Hedged to CAD ETF |
22.36% |
6.66% |
7.75% |
- |
9.08% |
February 10, 2016 |
|
BMO MSCI USA High Quality Index ETF |
39.32% |
14.13% |
17.68% |
- |
16.79% |
November 05, 2014 |
|
BMO MSCI USA High Quality Index ETF (Hedged Units) |
37.12% |
8.58% |
- |
- |
14.67% |
July 16, 2020 |
|
BMO MSCI USA High Quality Index ETF (USD Units) |
38.76% |
9.73% |
- |
- |
15.79% |
July 16, 2020 |
|
BMO S&P 500 Index ETF |
38.08% |
13.07% |
16.17% |
14.98% |
17.61% |
November 14, 2012 |
|
BMO S&P 500 Hedged to CAD Index ETF |
35.95% |
7.50% |
13.50% |
11.45% |
13.22% |
May 29, 2009 |
|
BMO S&P 500 Index ETF (USD Units) |
37.53% |
8.72% |
14.89% |
12.58% |
14.45% |
November 14, 2012 |
Source: Bloomberg, as of October 31, 2024.
1 BMO Global Asset Management/Morningstar, as of October 31, 2024.
2 The portfolio holdings are subject to change without notice.
3 Bloomberg, as of October 31, 2024.
4 Beta: A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.
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