BMO Aggregate Bond Index ETF
ZAG.TO (TSX)
The BMO Aggregate Bond Index ETF (ZAG) stands out with an ultra-low management expense ratio of just 0.08%, making it an appealing choice for investors seeking stability through broad diversification in Canadian government and corporate bonds. With a dividend yield of approximately 3.48%, it provides reliable income, although it has faced challenges with a one-year return of only 1.10% and a five-year return of -16.03%. This ETF is particularly suitable for retirees looking to buffer their portfolios against market volatility while supporting withdrawals.
Pros:
- Broad diversification in Canadian government and corporate bonds
- Ideal for stability and rebalancing
Cons:
- Sensitive to rate hikes
- Potential depreciation in value when interest rates rise
The BMO Aggregate Bond Index ETF (ZAG.TO) is a suitable option for conservative investors, particularly retirees, who prioritize income generation and stability through diversified bond exposure, despite recent underperformance in returns. Its low management fees and consistent dividend yield may offer a degree of protection against market fluctuations, but potential investors should weigh these factors against the ETF's recent performance trends.