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 date | February 15, 2019 |
| Assets allocation | Stocks = 81.35%, fixed income = 18.65% and cash = 0.00% |
| Minimum investment | $39.41 |
| Management fee | 0.18% |
| MER | 0.20% |
| Eligibility | TFSA, RESP, RRSP, RRIF & DPSP |
| Total holdings | 9 |
| Cumulative return since inception | 46.23% |
| Annualized dividend yield | 2.25% |
| Distribution frequency | Quarterly |
| Risk level | Low-medium |
| Dividend frequency | Quarterly |
| Exchange | Toronto 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:
| Asset | Allocation |
| Stocks | 81.35% |
| Fixed income | 19.65% |
| Cash | 0.00% |
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 Name | Ticker | Allocation |
| BMO S&P 500 INDEX ETF | ZSP | 37.08% |
| BMO S&P/TSX CAPPED COMPOSITE INDEX ETF | ZCN | 19.05% |
| BMO MSCI EAFE INDEX ETF | ZEA | 16.20% |
| BMO AGGREGATE BOND INDEX ETF | ZAG | 13.08% |
| BMO MSCI EMERGING MARKETS INDEX ETF | ZEM | 5.94% |
| BMO US AGGREGATE BOND INDEX ETF | ZUAG/F | 5.56% |
| BMO S&P US MID CAP INDEX ETF | ZMID | 2.19% |
| BMO S&P US SMALL CAP INDEX ETF | ZSML | 0.88% |
| CASH | – | 0.00% |
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.
| Country | Allocation |
| United States | 43.67% |
| Canada | 33.56% |
| Japan | 3.94% |
| United Kingdom | 1.99% |
| France | 1.82% |
| China | 1.56% |
| Germany | 1.52% |
| Australia | 1.40% |
| Switzerland | 1.16% |
| Other | 7.41% |
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:
| Year | Return |
| One year | 9.85% |
| Two years | 3.40% |
| Three years | 6.08% |
| Since inception | 7.96% |
The following are the cumulative portfolio performance of ZGRO as of January 31, 2024.
| Year | Return |
| One year | 9.85% |
| Two years | 6.91% |
| Three years | 19.36% |
| 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
Overall Rating
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 Feature | ZGRO ETF | VGRO ETF |
| Portfolio manager | BMO Assets Management Inc. | Vanguard Investments Canada Inc. |
| Date of inception | February 15, 2019 | January 25, 2018 |
| Asset allocation | Stocks = 81.35%, fixed income = 18.65% and cash = 0.00% | Stocks = 80.21%, bonds = 19.74%, short-term reserves = 0.05% |
| Management fee | 0.18% | 0.22% |
| MER | 0.20% | 0.24% |
| 1-year return | 9.85% | +9.73% |
| Annualized dividend yield | 2.25% | 2.61% |
| Dividend frequency | Quarterly | Quarterly |
| Top market capitalization | US | US/Canada |
| Registered plans | Yes | No |
| Risk level | Low-medium | Low-medium |
| Exchange | Toronto Stock Exchange | Toronto Stock Exchange |
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 Feature | ZGRO ETF | XGRO ETF |
| Portfolio manager | BMO Assets Management Inc. | BlackRock |
| Date of inception | February 15, 2019 | June 21, 2007 |
| Asset allocation | Stocks = 81.35%, fixed income = 18.65% and cash = 0.00% | Equity = 81.45%, fixed income = 18.38% & cash and/or derivatives = 0.17% |
| Management fee | 0.18% | 0.18% |
| MER | 0.20% | 0.20% |
| 1-year return | 9.85% | 9.75% |
| Annualized dividend yield | 2.25% | 2.97% |
| Dividend frequency | Quarterly | Quarterly |
| Top market capitalization | US | US/Canada |
| Registered plans | Yes | Yes |
| Risk level | Low-medium | Low-medium |
| Exchange | Toronto Stock Exchange | Toronto Stock Exchange |
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 Feature | ZGRO ETF | VGRO ETF | XGRO ETF |
| Portfolio manager | BMO Assets Management Inc. | Vanguard Investments Canada Inc. | BlackRock |
| Date of inception | February 15, 2019 | January 25, 2018 | June 21, 2007 |
| Asset allocation | Stocks = 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 fee | 0.18% | 0.22% | 0.18% |
| MER | 0.20% | 0.24% | 0.20% |
| 1-year return | 9.85% | +9.73% | 9.75% |
| Annualized dividend yield | 2.25% | 2.61% | 2.97% |
| Dividend frequency | Quarterly | Quarterly | Quarterly |
| Top market capitalization | Canada | US/Canada | US/Canada |
| Registered plans | Yes | No | Yes |
| Risk level | Low-medium | Low-medium | Low-medium |
| Exchange | Toronto Stock Exchange | Toronto Stock Exchange | Toronto 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
Summary
ZGRO is one of the best growth ETF portfolios in Canada, having low management fees and MERs, competitive dividend yields and returns.
