To succeed as an investor, you need to overcome the temptation to think that you can succeed as a fair-weather investor—one who is in the market when prices are going up, and out of the market during the inevitable downturns.


If you try to do that, you will wind up selling when much of the damage is done, and buying your way back in when much of the recovery has already taken place. Worse, you may wind up buying back in at higher prices than you got when you sold.

his month, we highlight a new ETF from BMO that invests in physical commodities, as well as a leveraged single-stock ETF from one of Canada’s smaller ETF managers.


BMO Broad Commodity ETF $30.58 (CBOE symbol ZCOM) invests in a range of physical commodities.



The ETF tracks the Bloomberg Commodity Index. The current segment split of the ETF is Agriculture (28%), Energy (26%), Precious Metals (25%), Industrial Metals (15%), and Livestock (6%). The commodities are not held in a physical form, but rather through the use of derivative instruments.

After a dismal period between 2021 and 2023, major Chinese companies have performed very well since the start of 2024—top holdings in the iShares China Large-Cap ETF (FXI) such as Xiaomi, Tencent, Trip.aom and Alibaba all doubled over that time period.


Notably, however, the top performer among the ETF holdings over the past two years was the designer toy company Pop Mart International, with a 10-fold rise in its stock price.



Pop Mart was founded as a retail store in 2010 by Wang Ning in Beijing, China. Pop Mart became a cultural phenomenon by focusing on youth trends and the growing appetite for collectible art toys.

The Chinese economy expanded rapidly between 2000 and 2019, when annual growth averaged a high 9%. It has recovered from the pandemic, but its growth trajectory going forward is uncertain. That’s because of factors like the trade war with the U.S. and other Western countries (including a ban on AI chip exports to China), as well as a major property sector downturn. Longer term, the country’s aging population is another major concern.


Meantime, here’s a look at an ETF that provides exposure to the top Chinese publicly listed companies.

Banks and insurance companies have performed strongly over the past year, easily beating the main market indices. However, banks, in particular, use a lot of debt to boost returns, and are prone to volatility when they encounter problems.


We’ve always said most investors should diversify within the finance sector by holding not just banks, but also insurers, fund managers and so on. Notably, a blend of banks and insurance companies produces a better risk and return profile than a portfolio of just banks.



We provide more detail about the risks and returns of the main financial groups in the Supplement on page 120.

BMO S&P/TSX CAPPED COMPOSITE INDEX ETF $41.29 (Toronto symbol ZCN; TSINetwork ETF Rating: Conservative; Market cap: $12.5 billion) tracks the S&P/TSX Capped Composite Index.


The index includes over 200 stocks, which represent more than 90% of the Canadian equity market. Individual stock weights are capped at 10% of the index’s market capitalization.



The ETF started up in May 2009 and charges a very low MER of 0.06%. The fund yields 2.3%.



We like most of the stocks this ETF holds. However, we see the “capped” aspect of its mandate as a negative, since it introduces a filtering mechanism that will hurt your returns.

Closed-end funds work with a fixed asset base invested in a portfolio of securities. The value of their assets rises and falls depending on how they invest. Their units trade like stocks, and most often on a stock exchange. They may trade above the per-unit value of the investments they hold—what brokers call “at a premium” to their net asset value. However, for the most part, they trade at a discount.


If the manager of a closed-end fund does a bad job, unit owners pay a double penalty: the value of the fund’s assets falls, and the discount on that value also widens. So it’s a mistake to invest in a closed-end fund simply because you like the area it focuses on, or because it’s available at a discount to asset value. You need to look at how wisely it picks stocks to invests in.

Over the long term, most stock markets move up. But there are times when sharp declines inflict heavy losses on any investor’s portfolio holdings. For example, in 2008 to 2009, U.S. stock markets declined by 51%; in 2020, they dropped by 34%; and in 2022, they fell 25%. Other markets had similar declines. What’s more, these sharp losses often persist for long periods of time.

Meanwhile, there are a range of ETFs that aim to help investors buffer their portfolios against significant losses. Here are two of those options.

As well, in the Supplement on page 119, we discuss the extent and frequency of major declines and the time needed to recover those losses.

Cisco Systems is a pioneer in computer networking and has stayed a market leader by successfully adapting to change.


For example, in 2015, the company—then focused on equipment—decided to shift to providing network software. The move reduced Cisco’s dependence on hardware sales, which tend to be cyclical. Another key shift for the company was its decision to sell its software as a recurring subscription rather than as a one-time purchase. That has further stabilized its revenue stream.



Now, the company is in the middle of another transition, as it incorporates artificial intelligence (AI) tools into its products. This particular shift lets Cisco’s clients process increasingly large amounts of data to prevent costly cyber incidents.