ZGRO Review
|

ZGRO Review 2024: BMO Growth ETF Analysis [Updated]


ZGRO Review Rating: 4.0/5


If you’re looking for an all-in-one ETF for a long-term growth solution or capital appreciation, ZGRO is one of the top options to consider in Canada.

The BMO Growth ETF (ZGRO) is one of the best growth ETFs in Canada that has been providing long-term capital growth to investors since 2019.

But like every other portfolio, ZGRO is tailored to investors with certain needs and situations. Are you one of them? Why shouldn’t you use the ZGRO ETF?

In this ZGRO review, I provide an in-depth unbiased analysis of what the portfolio entails ranging from its assets allocations, underlying holdings, returns, fees and more. 

With a side-by-side comparison of ZGRO and similar portfolios, you should be able to make an informed decision after reading this review. 

Overview of BMO Growth ETF (ZGRO)

Before we go into the detailed review of ZGRO, let’s have an overview of what the ETF entails as of February 14, 2024:

Inception dateFebruary 15, 2019
Assets allocationStocks = 81.35%, fixed income = 18.65% and cash = 0.00%
Minimum investment$39.41
Management fee0.18%
MER0.20%
EligibilityTFSA, RESP, RRSP, RRIF & DPSP
Total holdings9
Cumulative return since inception46.23%
Annualized dividend yield2.25%
Distribution frequencyQuarterly
Risk levelLow-medium
Dividend frequencyQuarterly
ExchangeToronto Stock Exchange

What is ZGRO?

ZGRO is the ticker symbol of the BMO Growth ETF that’s managed by BMO Global Asset Management.

Founded on February 15, 2019, ZGRO seeks to provide investors with long-term capital appreciation by investing in low-cost diversified ETFs.

The ETF is traded on the Toronto Stock Exchange and is weighted towards the Canadian market. This makes it ideal for investors looking for a portfolio with home bias.

With competitive returns and dividend yield, low management fees and MERs, ZGRO distinguishes it from other growth portfolios in Canada.

However, when it comes to choosing the perfect growth ETF, you need to have a comprehensive view in order to make an informed decision. That’s exactly what this ZGRO review helps you achieve.

ZGRO Investment Objective and Strategy

The investment objective of ZGRO is to offer investors long-term capital growth with a low-medium level of risk.

To achieve its investment objective, the ETF invests in low-cost and diversified ETFs consisting of global equity and fixed income securities.

The fund manager, that’s BMO Global Asset Management, uses index-based asset allocation on ZGRO ETF and rebalances them quarterly.

ZGRO Assets Allocation

Like every other ETF portfolio, ZGRO proportionally allocates funds to assets based on its investment objective. 

As of February 13, 2024, the ETF has the following assets allocations:

AssetAllocation
Stocks81.35%
Fixed income 19.65%
Cash0.00%

Each of the allocations contributes proportionally to the overall returns and risk level of the ZGRO portfolio.

That said, ZGRO asset allocation changes from time to time to reflect the current market realities.

ZGRO Top Holdings

As February 13, 2024, the ETF has the following holdings:

ETF NameTickerAllocation
BMO S&P 500 INDEX ETF ZSP37.08%
BMO S&P/TSX CAPPED COMPOSITE INDEX ETF ZCN19.05%
BMO MSCI EAFE INDEX ETFZEA16.20%
BMO AGGREGATE BOND INDEX ETF ZAG13.08%
BMO MSCI EMERGING MARKETS INDEX ETF ZEM5.94%
BMO US AGGREGATE BOND INDEX ETFZUAG/F5.56%
BMO S&P US MID CAP INDEX ETF ZMID2.19%
BMO S&P US SMALL CAP INDEX ETF ZSML0.88%
CASH0.00%

Compared to similar portfolios, it’s obvious that ZGRO’s underlying holdings are few, limiting its diversification. 

ZGRO Sector Allocations

To reduce investment risk, ETFs usually invest funds across different sectors ranging from financials, industrials, technology, energy sectors and so on. 

ZGRO is not an exception as it invests 80.89% of funds in equity-based sectors and 19.67% in fixed income-based sectors (as of February 13, 2024).

The downside here is that ZGRO doesn’t disclose information about the specific sectors it allocates funds, unlike other growth ETFs. 

ZGRO Geographic Allocations

Geographic allocations or market allocations indicate the countries or regions in which an ETF invests its funds. 

Below are the geographic allocations of ZGRO as of February 13, 2024.

CountryAllocation
United States43.67%
Canada33.56%
Japan3.94%
United Kingdom1.99%
France1.82%
China1.56%
Germany1.52%
Australia1.40%
Switzerland1.16%
Other7.41%

Two things can be pointed out from the ZGRO’s current geographic allocations. First, it’s weighted towards the US market with a significant allocation to the Canadian market.

Secondly, the ETF is diversified across different regions and countries, making it a global growth portfolio.

ZGRO Performance

As different ETF portfolios have varying portfolio performances, it’s essential to know the performance of ZGRO before deciding. 

Below are the annualized performance of the ETF as of January 31 2024:

YearReturn
One year9.85%
Two years 3.40%
Three years6.08%
Since inception 7.96%

The following are the cumulative portfolio performance of ZGRO as of January 31, 2024.

YearReturn
One year9.85%
Two years6.91%
Three years19.36%
Since inception 46.23%

Compared to the returns of similar portfolios, ZGRO had competitive returns. However, this is not a guarantee that the portfolio will perform better in the future.

Instead, the past portfolio performance gives you an insight into the likely outcome of your investment.

ZGRO Fees

ETF portfolios come with a management fee and MER which can impact your overall investment returns. Below are the management fee and MER of ZGRO as of the time of writing this review. 

  • Management fee = 0.18%
  • MER: 0.20%

Compared to mutual funds or other growth ETF portfolios in Canada, ZGRO is low-cost.

Pros and Cons of ZGRO ETF

From the above ZGRO review, we can easily identify the following pros and cons of the ETF:

ZGRO Pros

  • Low management fee and MER: With a 0.18% management fee and 0.20% MER, ZGRO positioned itself as a low-cost growth ETF portfolio in Canada. 
  • Competitive returns: ZGRO has competitive returns compared to the returns of similar portfolios in Canada. 
  • Competitive dividend yield: If you’re looking for a growth ETF portfolio with a competitive dividend yield, you can’t make the wrong choice with ZGRO.
  • Registered plans: Unlike other growth ETF portfolios out there, ZGRO supports registered plans ranging from TFSA, RESP, RRSP, RRIF & DPSP.

ZGRO Cons

  • Limited information: No information about the underlying holdings and the exact sectors that the ETF invests in. This may affect investors that invest based on certain values.

My ZGRO Review Rating

I rate ZGRO 4.0 out of 5 stars based on comparative analysis and the total rating of the following features. 

ZGRO Review Rating Methodology

Minimum investment
Diversification
Management fee
MER
Portfolio performance
Annualized dividend yield

Overall Rating

4

As a whole, my ZGRO review is positive and recommendable to investors looking for a growth ETF portfolio with:

  • Home-bias
  • Competitive dividends and returns
  • Low management fee and MER
  • Registered plans

How to Buy ZGRO ETF

If ZGRO suits your needs, you have two options of buying it depending on your situation or investment experience.

The first option is to buy the ETF yourself through an online brokerage such as Wealthsimple Trade. The interesting part is that you wouldn’t be charged any commission for trading ZGRO or other stocks and ETFs on Wealthsimple Trade. 

The second option for buying ZGRO is through your financial advisor. If you don’t have one, ask around for recommendations. A financial advisor has the skills and experience to invest on your behalf, helping you save time and reduce risk.

Which option to choose? It all boils down to your situation!

Using an online discount brokerage like Wealthsimple Trade will save you a lot of trading fees since there are no commissions. However, you need considerable knowledge about the stock market to handle everything yourself.  

However, you can use a financial advisor if you have little investing experience and are not concerned about investment costs. 

Preferably, you can have a robo-advisor invest on your behalf at a low cost. Wealthsimple Invest and Questwealth Portfolios are some of the best robo-advisors out there. 

RELATED: Best Free Trading Platforms in Canada

ZGRO vs VGRO

Key FeatureZGRO ETFVGRO ETF
Portfolio managerBMO Assets Management Inc.Vanguard Investments Canada Inc.
Date of inceptionFebruary 15, 2019January 25, 2018
Asset allocationStocks = 81.35%, fixed income = 18.65% and cash = 0.00%Stocks = 80.21%, bonds = 19.74%, short-term reserves = 0.05%
Management fee0.18%0.22%
MER0.20%0.24%
1-year return 9.85%+9.73%
Annualized dividend yield2.25%2.61%
Dividend frequencyQuarterlyQuarterly
Top market capitalizationUSUS/Canada
Registered plansYesNo
Risk levelLow-mediumLow-medium
ExchangeToronto Stock ExchangeToronto Stock Exchange
Comparison as of February 14, 2024

VGRO, the ticker symbol of the Vanguard Growth ETF Portfolio is another top growth ETF that’s managed by Vanguard Investments Canada Inc.

While VGRO has similar investment objectives and strategies as ZGRO, ZGRO outshines VGRO in terms of fees, portfolio performance, and eligibility for registered plans.

Notwithstanding, you can’t make the wrong choice with VGRO if you’re looking for a US-weighed growth ETF with greater diversification.

ZGRO vs XGRO

Key FeatureZGRO ETFXGRO ETF
Portfolio managerBMO Assets Management Inc.BlackRock
Date of inceptionFebruary 15, 2019June 21, 2007
Asset allocationStocks = 81.35%, fixed income = 18.65% and cash = 0.00%Equity = 81.45%, fixed income = 18.38% & cash and/or derivatives = 0.17%
Management fee0.18%0.18%
MER0.20%0.20%
1-year return9.85%9.75%
Annualized dividend yield2.25%2.97%
Dividend frequencyQuarterlyQuarterly
Top market capitalizationUSUS/Canada
Registered plansYesYes
Risk levelLow-mediumLow-medium
ExchangeToronto Stock ExchangeToronto Stock Exchange
Comparison as of February 14, 2024

XGRO, the trading ticker of the iShares Core Growth ETF Portfolio, is the equivalent of ZGRO and VGRO with similar portfolio objectives and strategies.

XGRO also has the same low management fee and MER as ZGRO. However, its had higher returns and dividend yield in the last distribution.

Like VGRO, XGRO is also weighted to the US markets on equities and the Canadian markets on bond allocations.

Overall, if VGRO is not your perfect ZGRO alternative, XGRO will likely be.

ZGRO vs VGRO vs XGRO

The following is a summary of the key differences between ZGRO vs VGRO vs XGRO as of February 13, 2024:

Key FeatureZGRO ETFVGRO ETFXGRO ETF
Portfolio managerBMO Assets Management Inc.Vanguard Investments Canada Inc.BlackRock
Date of inceptionFebruary 15, 2019January 25, 2018June 21, 2007
Asset allocationStocks = 81.35%, fixed income = 18.65% and cash = 0.00%Stocks = 80.21%, bonds = 19.74%, short-term reserves = 0.05%Equity = 81.45%, fixed income = 18.38% & cash and/or derivatives = 0.17%
Management fee0.18%0.22%0.18%
MER0.20%0.24%0.20%
1-year return9.85%+9.73%9.75%
Annualized dividend yield2.25%2.61%2.97%
Dividend frequencyQuarterlyQuarterlyQuarterly
Top market capitalizationCanadaUS/CanadaUS/Canada
Registered plansYesNoYes
Risk levelLow-mediumLow-mediumLow-medium
ExchangeToronto Stock ExchangeToronto Stock ExchangeToronto Stock Exchange

READ MORE:

How to Choose the Best Growth ETF Portfolio in Canada

If you’re still confused about which growth ETF portfolio to choose from the above review, consider the following factors to make an informed decision.

  • Asset allocation: While the above growth ETFs have the same investment objective and strategy, they have slightly different asset allocations. Even though the difference usually lies in a few points, they can impact the return and risk of the portfolio. 
  • Fees: As always, choosing an ETF portfolio with a low management fee and MER will save you more in the long run.
  • Competitive yield and performance: The aim of investing in a growth ETF is to achieve capital appreciation. Choosing a portfolio with a competitive yield and performance will give you good positive insights into your investment returns.

Verdict on ZGRO Review

ZGRO is indeed one of the best growth ETF portfolios in Canada. With a low management fee and MER, competitive dividend yield and returns, the ETF has distinguished itself from the competition.

From the above ZGRO review, you can see the ups and downs of the ETF and how it compares with similar portfolios in Canada.

I hope that you’re now able to decide whether ZGRO is perfect for you. If it’s not, don’t hesitate to consider VGRO or XGRO which are the current top ZGRO alternatives.

Which growth ETF are you going with? Please let me know in the comment section below. 

FAQs on ZGRO ETF Review

Is ZGRO a good ETF?

ZGRO is a good ETF if you’re looking for a growth ETF portfolio with low management and MER, competitive returns and dividend yield. 

How risky is ZGRO?

The risk level of ZGRO ranges from low to medium. With more than 80% of funds invested in equity, you should have below-average risk tolerance before investing in ZGRO.

What is ZGRO MER?

ZGRO MER is 0.20%. This is one of the lowest management expense ratios (MERs) you will find in Canada.

What is ZGRO dividend?

The last dividend of ZGRO was 2.25% per share as of January 31, 2024. The dividends are distributed quarterly to investors.

If you have more questions or concerns about this ZGRO review, kindly let me know in the comment section.  

ZGRO Review
4

Summary

ZGRO is one of the best growth ETF portfolios in Canada, having low management fees and MERs, competitive dividend yields and returns.


Share blog post

Leave a Reply

Your email address will not be published. Required fields are marked *