John Hood, president and portfolio manager at J.C. Hood Investment Counsel Inc. 
FOCUS: Options and ETFs
_______________________________________________________________

MARKET OUTLOOK

Markets are preoccupied with Keystone, NAFTA and the possibility of Trump’s tax reform going through. Fortunately, Keystone received approval this morning, but this will still be subject to legal skirmishing, so it's not a done deal. A positive sign, in any sense. My sense is that if tax reform is stalemated, then the “Trump Bump" will be largely wiped off the market, but only temporarily. The fact is that markets have been rising because U.S. companies are making money, so any decline would, in my view, be a buying opportunity. In Canada, even if NAFTA were junked, trade would not stop, but negotiations would persist for months if not years amid much uncertainty. Nevertheless, I like the industrial sectors in Canada and the U.S.

TOP PICKS

I have been complaining on previous shows that there was too much redundancy among Canadian ETFs; most were 65 to 70 per cent financial, energy and materials. However, I had overlooked a small ETF from BMO (ZIN).This search was prompted by Horizons having just launched INOC, which includes industrials with consumer goods and services, some financials and tech. These two ETFs will fill in the blanks for those wanting ETFs that are not so overweight financials and energy.

BMO EQUAL WEIGHT INDUSTRIALS ETF (ZIN.TO)

HORIZONS INOVESTOR CANADIAN EQUITY INDEX ETF (INOC.TO) - financials 24 per cent, consumer goods/services 27 per cent, industrials 32 per cent, tech 8 per cent

INDUSTRIAL SELECT SECTOR SPDR FUND (XLI.US)

PAST PICKS: MAY 11, 2017

UPDATE:
I sold the Questrade Fixed Income Core Plus ETF (QCP.TO), which was being merged into a Wisdom Tree bond ETF with overly long duration.

QUESTRADE RUSSELL 1000 EQUAL WEIGHT U.S. HEALTH CARE INDEX ETF HCAD (QRH.TO)
Since Wisdom Tree acquired Questrades ETFs, it is unclear whether this ETF will continue or be substantially changed. I did not own any but had recommended it. I do not like the uncertainty.

• Then: $21.22
• Now: $22.35
• Return: 5.32%
• Total return: 5.32%

BMO EUROPEAN HIGH DIVIDEND COVERED CALL HEDGED TO CAD ETF (ZWE.TO)

• Then: $22.54
• Now: $21.92
• Return: -2.75%
• Total return: 0.47%

ENERGY SELECT SECTOR SPDR ETF (XLE.US)

• Then: $67.98
• Now: $67.27
• Return: -1.04%
• Total return: 0.93%

TOTAL RETURN AVERAGE: 2.24%
 

WEBSITE: www.jchood.com