ETF Portfolio Blueprint

You’ve probably heard of thematic ETFs—funds that target specific trends, ideas, or industries instead of sticking to broad market or sector exposure. There’s a wide range of quality in this space. Some thematic ETFs are genuinely solid, like the Global X US Infrastructure Development ETF (PAVE) and the Global X Defense Tech ETF (SHLD). These funds focus on long-term themes with real tailwinds behind them. Then there are the not-so-great ones. I won’t name names, but you know the type: niche focus, sky-high expense ratios, launched just as the hype cycle peaked—classic recipes for disappointment. On top of that, there are thematic multi-funds, like the SPDR S&P Kensho New Economies Composite ETF (KOMP), which roll several trends into one. And that got me thinking: what if I made my own concoction? Presenting the “Four Elements” portfolio, inspired by the ancient pseudoscience that boiled the universe down to fire, water, air, and earth—before we had things like the periodic table. Keep reading to find out how this silliness works and, more importantly, how it fared against the S&P 500.

I’ve had solid experiences using platforms like Wealthsimple and Interactive Brokers for Canadian and U.S. ETF investments, respectively. But it’s always worth paying attention when one of Canada’s big banks steps up its game, especially with features designed for investors of all experience levels. BMO InvestorLine is a prime example. Not only do you get commission-free trading on some of Canada’s most popular ETFs, but the platform offers tools that go beyond the basics. The new BMO Active Trader platform brings advanced capabilities, like multi-leg options, customizable screeners, and strategy builders—while real-time buying power calculations help you evaluate margin trades with confidence. On top of that, BMO InvestorLine allows you to benchmark, customize, and track performance with easy-to-use analysis tools that make managing your portfolio a breeze. BMO isn’t just a bank—it’s also home to a leading lineup of low-cost, passively managed ETFs that make building a diversified portfolio simple and affordable. If you’re trading on BMO InvestorLine, here are a few BMO ETFs worth considering for a globally diversified portfolio.

Forget FAANG. The top companies dominating markets from 2023 onwards are the so-called Magnificent Seven: Apple Inc. (AAPL), Amazon Inc. (AMZN), Alphabet Inc. (GOOGL), Meta Platforms, Inc. (META), Microsoft Corporation (MSFT), NVIDIA Corporation (NVDA), and Tesla, Inc. (TSLA). These seven giants hold commanding positions in both the S&P 500 and Nasdaq-100 indexes. They represent a mix of sectors: technology (Apple, Microsoft, NVIDIA), communication services (Meta, Alphabet), and consumer discretionary (Amazon, Tesla). If you’re looking for exposure beyond traditional index funds, U.S. investors have a couple of options. The Roundhill Investments Magnificent Seven ETF (MAGS) offers a straightforward play on these stocks, while the YieldMax ETFs Magnificent 7 Fund of Option Income ETFs (YMAG) is designed for income seekers, boasting a jaw-dropping 72.45% distribution yield as of December 9—yes, that’s not a typo. Why is that yield so significant? Because dividends from the Magnificent Seven themselves are meagre. Microsoft and Apple offer modest payouts, NVIDIA, Meta, and Alphabet pay only token amounts, and Amazon and Tesla skip dividends entirely. YMAG generates its yield through a complex options strategy. Canadian investors, however, face a different challenge. You can buy Canadian Depositary Receipts (CDRs) for Magnificent Seven exposure or, if you want to combine income, you could convert to USD and invest in YMAG—or hold 100 shares of each stock to sell covered calls, a highly capital-intensive strategy. But there’s another way. Enter the Purpose Investments YieldShares ETFs. Let’s explore how they work and how you can combine them to build your very own Magnificent Seven monthly income portfolio.

The definition of “alternative assets” is a bit hazy, but I interpret it as anything outside the usual stocks, bonds, or cash. We’re talking about assets on the fringes—those typically used by institutional investors like pension funds or hedge funds. Surprisingly, there’s a growing number of ETFs in this space, and some are specifically tailored to generate above-average income. If you already have a yield-focused portfolio of dividend stocks, junk bonds, covered call ETFs, or REITs, these alternatives can make a powerful satellite allocation to diversify your sources of risk and yield. Emphasis on satellite—many of these assets are exotic and come with unique risks. I wouldn’t recommend using them as a core holding, especially for beginners. That said, here’s a look at three ETFs I’d combine in equal weights to hunt for alternative yield.

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Canadian banks love to push Guaranteed Investment Certificates (GICs) as a safe option for your money, often touting their safety of principal thanks to Canada Deposit Insurance Corporation (CDIC) coverage. No thanks. The last thing I want to do is lock away my money and lose access to it for months—or even years. On top of that, the GIC rates offered by the big banks are underwhelming (with the exception of EQ Bank, which I’ll admit is awesome). If you’re looking to stash cash in a Tax-Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP), First Home Savings Account (FHSA), or even a non-registered account, consider using an ETF instead. These options may not be CDIC insured, but they’re about as safe as it gets, with minimal price volatility. Their yields fluctuate in lockstep with prevailing interest rates, keeping your returns competitive. Here’s a look at three types of low-risk fixed income ETFs I’ve personally used to replace a GIC before.

Nearly all the major asset managers—State Street, Vanguard, Schwab, and iShares—offer a lineup of dividend-focused ETFs. These usually include a mix of high-yield options for income seekers and dividend growth funds for those prioritizing long-term appreciation. For iShares, the high-yield option for U.S. markets is the iShares Core High Dividend ETF (HDV). The “core” in its name signals that it’s part of iShares’ low-cost “portfolio building block” lineup, designed to be an affordable staple for investors building diversified portfolios. However, a slick name and strong marketing alone aren’t enough reason to invest. Here’s my critical analysis of how HDV measures up as a high-yield dividend ETF.

Last week, I wrote a fairly controversial article titled "Go Woke, Go Broke? 3 ETFs to Buy if You’re a Conservative or Support Donald Trump." In the interest of fairness and political neutrality, I’m flipping the script today to profile some unique ETFs that cater more towards progressives and those with left-leaning views. I’m excluding most environmental, social, and governance (ESG) ETFs from this analysis. While they often incorporate considerations valued by this demographic, they aren’t overtly political in nature. Instead, I’ll focus on ETFs with themes or strategies more explicitly aligned with progressive ideals. Here are three that may have flown under your radar, and a critical look at their performance so far.

While markedly smaller than the U.S., Canada’s ETF market has a knack for leading the way with innovative products. From money market ETFs to high-interest savings account (HISA) ETFs, and even spot cryptocurrency ETFs, Canadians have enjoyed first-to-market access to these cutting-edge solutions—well ahead of their American counterparts. But one advisor-focused category has been notably absent: ETFs holding Collateralized Loan Obligations (CLOs). CLOs are securitized pools of corporate loans, typically issued to companies with lower credit ratings, bundled together to spread risk and generate yield. That all changed on September 18, when Corton Capital Inc., a boutique Canadian asset manager, introduced the Corton Enhanced Income Fund (RAAA)—Canada’s first ever ETF offering direct exposure to CLOs. Given that this is a new product in an emerging niche for Canadian advisors, I’ve put together this quick read to explain what CLOs are and how RAAA is designed.

Political influence and polarization along party lines is increasingly unavoidable in investing. Since Donald Trump's victory in the 2024 presidential election, there has been a surge of analyses on the "Trump Trade" — I've even penned a few pieces myself specific to ETFs. Interestingly, the intersection of politics and investing extends beyond market speculation. Take Strive Asset Management, for instance, co-founded by Vivek Ramaswamy, who alongside Tesla CEO Elon Musk was recently tapped by Trump to lead the Department of Government Efficiency (DOGE). Strive champions Milton Friedman’s principle of "shareholder primacy," which argues that companies should prioritize shareholder returns and dismiss non-pecuniary factors like environmental, social, and governance (ESG) considerations. Their ETF lineup reflects these considerations. However, Strive is not alone in this space. A number of boutique ETF firms, supported by ETF white labelers, have launched ETFs specifically tailored for conservative, right-leaning investors. Clearly, there’s somewhat of a demand for these specialized ETFs. Here’s a breakdown of the top three ETFs for those who prefer their investments to reflect a right-wing political leaning.