In this post, we will discuss one of the most popular Canadian Bank ETFs: ZEB BMO Equal Weight Banks Index. We will review ZEB’s historical performance and compare to similar ETFs in the market.
ZEB: Investment objective
The BMO Equal Weight Banks ETF has been designed to replicate, to the extent possible, the performance of the Solactive Equal Weight Canada Banks Index, net of expenses. The index includes the major Canadian banks with a balanced allocation as you can see in the composition of the portfolio below.
Updated daily – ZEB ETF
Banking sector perspectives 2024
In 2024, the Canadian banking sector continues to demonstrate robust resilience and stability, despite a backdrop of global economic uncertainties. This sector is characterized by strong balance sheets, prudent management, and a well-regulated environment, which together contribute to a solid foundation for growth. Investors can expect Canadian banks to maintain their status as reliable pillars of the economy, thanks to their diversified income streams and conservative lending practices.
Interest rate trends will play a significant role in shaping the sector’s performance this year. While rising interest rates can enhance bank profitability by widening net interest margins, they also pose challenges by increasing borrowing costs for consumers and businesses. Conversely, if rates decline, banks might experience compressed margins but could benefit from higher loan demand. Thus, the interest rate environment will be a critical factor for investors to monitor.
Technological innovation remains a key driver of competitiveness in the Canadian banking sector. Banks are investing heavily in digital transformation to improve operational efficiency and customer experience. These technological advancements are not only essential for retaining market share but also for capturing new growth opportunities in an increasingly digital world. This focus on innovation positions Canadian banks to continue thriving in a rapidly changing landscape.
In conclusion, the Canadian banking sector in 2024 offers a mix of opportunities and challenges. Its resilience, bolstered by strong regulatory oversight and technological investments, makes it an attractive area for investment. By closely monitoring interest rates, regulatory changes, and economic indicators, investors can navigate this sector with confidence, capitalizing on its strengths while being mindful of potential risks.
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ZEB ETF review: AUM, MER and Dividend yield comparison
| AUM in M | MER % | Div Yld | |
| FIE – Ishares CDN Fin Mthly Income | 978 | 0.89 | 5.85 |
| ZEB -BMO S&P TSX Equal Weight Banks Indx | 2,800 | 0.28 | 3.08 |
| ZWB –BMO Covered Call Canadian Banks | 2,700 | 0.72 | 5.37 |
| XFN –iShares S&P/TSX Capped Financials Index | 1,900 | 0.61 | 2.66 |
ZEB ETF review: Performance comparison
Based solely on historical performance, ZEB -BMO S&P TSX Equal Weight Banks Index had one of the best performance in the past 5 years. In addition, the fund pays around a 3% dividend yield. The management expense ratio is at 0.28%, which is one of the lowest among our list.
For income seekers, FIE Ishares CDN Fin Mthly Income offers an attractive dividend yield above 5%.
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ZEB Holdings
| Weight (%) | Name |
| 17,18% | BANK OF MONTREAL |
| 16,90% | TORONTO-DOMINION BANK/THE |
| 16,78% | CANADIAN IMPERIAL BANK OF COMMERCE |
| 16,59% | NATIONAL BANK OF CANADA |
| 16,50% | ROYAL BANK OF CANADA |
| 15,86% | BANK OF NOVA SCOTIA/THE |
| 0,19% | CASH |
Please consult issuers’ website for up-to-date data
ZEB dividends
| Amount | Adj. Amount | Ex-Div Date | Record Date | Pay Date | Declare Date |
|---|---|---|---|---|---|
| 0.1400 | 0.1400 | 5/30/2024 | 5/30/2024 | 6/4/2024 | 5/23/2024 |
| 0.1400 | 0.1400 | 4/26/2024 | 4/29/2024 | 5/2/2024 | 4/19/2024 |
| 0.1400 | 0.1400 | 3/27/2024 | 3/28/2024 | 4/2/2024 | 3/20/2024 |
| 0.1400 | 0.1400 | 2/27/2024 | 2/28/2024 | 3/4/2024 | 2/20/2024 |
| 0.1400 | 0.1400 | 1/29/2024 | 1/30/2024 | 2/2/2024 | 1/22/2024 |