5 top investing ideas from ETF Investor Day

#1. The equal-weight thesis that stole the show

Tony Dong, founder of ETF Portfolio Blueprint, received the loudest applause of the day after making the case for taking an equal-weight approach to U.S. equities rather than simply defaulting to traditional market-cap weighted S&P 500 exposure.

Importantly, Dong wasn’t bearish on U.S. equities. In fact, he repeatedly stressed he remains structurally bullish on American capitalism and long-term equity ownership.

"I think that there's something unique about American-style capitalism that encourages profits and growth over time, possibly to the detriment of everyone else," he said.

But he also argued investors should think carefully about how they access U.S. equities at a time when market concentration and valuations are becoming increasingly extreme.

Dong pointed to the Shiller CAPE ratio sitting around 42 times earnings - not far below the peak of the dotcom bubble - while the Buffett Indicator, which compares total U.S. market capitalisation to GDP, recently climbed above 200%.

His concern is that many investors are becoming excessively dependent on a handful of mega-cap technology stocks driving index returns.

“I want my fortunes to be anchored to the U.S. economy - but not just on a group of 10 tech stocks that collectively account for 40% of the index,” he said.

Dong also pointed to research within the Fama-French factor model which has "historically shown that high-capex companies tend to underperform those with low-capex." 

His solution was equal weighting. “Every quarter, regardless of how big a stock is, what sector it is, what company it is, it gets rebalanced to the same weight,” Dong said.

“So if you have a performer that does well, you sell high. If you have someone that’s done poorly, you buy low - and that’s done systematically on your behalf.”

Investment idea

• TSX pick: BMO MSCI USA Equal Weight Index ETF (TSX: ZEQL)
• ASX equivalent: Betashares S&P 500 Equal Weight ETF (ASX: QUS) and Betashares S&P 500 Equal Weight Currency Hedged ETF (ASX: HQUS)

What does it do? These ETFs aim to reduce concentration risk within U.S. equities by equally weighting companies rather than weighting them by market capitalisation. Holdings are rebalanced regularly.

#2. The AI infrastructure trade hiding in commodities

While most investors associate the AI boom with software and semiconductors, Olivia Li, Director and Portfolio Manager, Non-Linear Solutions at BMO Global Asset Management, argued commodities may become an increasingly important part of the story.

Her view wasn’t just about diversification. Li noted commodities have historically shown low or even negative correlation to traditional asset classes, which can help portfolios during periods of market stress.

She pointed to the recent Iran conflict as an example, where commodities outperformed as oil prices surged while traditional assets initially struggled.

“For a more traditional asset allocation of equity and fixed income, adding commodities exposure can really help with portfolio diversification,” Li said.

Commodities may continue benefiting from structural AI-related demand, particularly across industrial metals tied to infrastructure, electricity networks and data centre buildouts.

“The growth in AI for industrial metals - the demand for that has been really great as well,” she said.

Investment idea

• TSX pick: BMO Bloomberg Commodity Index ETF (TSX: ZCOM)
• ASX equivalent: Global X Bloomberg Commodity ETF (ASX: BCOM)

What do they do? Both ETFs aim to provide exposure to a diversified basket of globally significant hard and soft commodities.

#3. The contrarian long-bond trade with 20%+ return potential

One of the more contrarian ideas of the day came from Larry Berman, Chief Investment Officer at QWealth Partners and a familiar face to many Canadian investors through his regular appearances on Canada’s BNN Bloomberg.

Berman argued long-duration U.S. government bonds may be deeply unloved - and that’s precisely why they could become interesting again. The U.S. 30-year Treasury yield recently climbed above 5%, its highest level in around 16 years. When bond yields rise, prices fall - and vice versa.

“It’s universally hated and everyone on the planet thinks yields are going higher,” Berman said.

However, he stressed this is ultimately a tactical trade, and the key ingredient to making it work are recessionary conditions which cause interest rates to fall.

“If the next recession trough occurs sometime over the next year, I think the potential return here could be between 18% and 23%.

You're going to get the capital gain from the rising bond price, and you're going to earn a 5% yield.”

Investment idea

• TSX pick: BMO Long-Term US Treasury Bond Index ETF (TSX: ZTL.F)
• ASX equivalent: Betashares US Treasury Bond 20+ Year Currency Hedged ETF (ASX: GGOV)

What do they do? Both ETFs aim to track the performance of long-term U.S. government debt, with the Canadian version following the Bloomberg Barclays US Treasury 20+ Year Index and the Australian equivalent the S&P U.S. Treasury Bond 20+ Year Index.

#4. The case for simplifying investing

Brandon Beavis, Co-Founder of popular portfolio tracking app Blossom Social, made the case for something much simpler: diversified all-in-one ETF portfolios.

“You're essentially getting an entire portfolio packaged up for you,” Beavis said.

He argued one of the biggest hidden costs of managing large portfolios of individual stocks is the emotional energy and constant monitoring required, particularly during volatile markets.

“It’s reduced a lot of the headache, disappointment and constant checking of your phone,” he said.

Beavis also highlighted the value of the ETF issuer taking care of automatic portfolio rebalancing and discipline, which helps investors maintain diversification without needing to constantly make buy and sell decisions themselves.

“You sleep better at night when you’re not betting everything on one part of the market,” he said.

Investment idea

• TSX pick: BMO All-Equity ETF (ZEQT)
• ASX equivalents: Betashares Diversified All Growth ETF (ASX: DHHF), VanEck Core+ Diversified High Growth ETF (ASX: VHGR) and Vanguard Diversified High Growth Index ETF (ASX: VDHG)

What do they do? These ETFs provide diversified exposure for growth-focused investors, though their portfolio construction differs significantly. For example, Vanguard includes a modest allocation to fixed income, VanEck incorporates alternatives, gold and smart beta exposures, while Betashares has a 100% equities allocation.

#5. AI exposure with an income stream

Valerie Grimba, Director, Institutional ETF Sales & Strategy at RBC Capital Markets, argued artificial intelligence remains one of the defining investment themes shaping markets.

“We are going through a structural shift,” Grimba said. “You’re seeing how it’s changing lives, workplaces and the economy at large.”

“And AI is still going to be a key driver as we look at markets over the next one, three and five years. So we want to be invested in tech at large.”

Her solution was a covered call technology ETF designed to maintain exposure to the Nasdaq while generating additional income through option-writing strategies.

Investment idea

• TSX pick: BMO Covered Call Technology ETF (TSX: ZWT)
• ASX equivalents: Global X Nasdaq 100 Covered Call ETF (ASX: QYLD) and Betashares Nasdaq 100 Yield Maximiser Fund (ASX: QMAX)

What do they do? Covered call ETFs aim to provide exposure to the underlying benchmark or basket of shares while generating additional income through option-writing strategies. In simple terms, investors generally sacrifice some capital upside in exchange for higher income.