All-in-One ETFs give investors an easy way to purchase stocks from thousands of companies at a low cost. Since launching in Canada a few years ago, these highly diversified ETFs have quickly gained popularity, and of course, brokerages took notice and started offering various all-in-ones to meet the demand.

ETF portfolios are the ultimate in passive investing because you don’t need to worry about figuring out how to manage asset allocation or rebalancing on your own. It’s all done for you.

Bank of Montreal launched a number of its own all-in-one ETF portfolios. In this ZGRO review, we will be sharing key facts about BMO’s ZGRO all-in-one ETF including its holdings, performance thus far, and how much it will cost you to invest in ZGRO.

Looking for more ETF Portfolio reviews? Check out our recently published VEQT 2022 ETF Review as well as our full rundown on the Best All-in-One ETFs in Canada.

ZGRO ETF Key Facts:

  • MER: 0.20%
  • Account Eligibility:  RRSP, TFSA, RRIF, RESP, DPSP, Non-Registered
  • Assets Under Management: $145.37 Million 
  • Date Created: February 15, 2019
  • Shares Outstanding: 4,302,001
  • Price/Earnings Ratio: 0
  • Price/Book Ratio: 0
  • Dividend Yield:  2.65%

What is The ZGRO ETF?

The BMO Growth ETF Portfolio ETF is one that targets growth with an 80/20 asset allocation. You may already be familiar with this asset allocation of 80% stocks and 20% bonds because it is a popular allocation for growth. By having up to 80% in stocks, you have the potential to earn more over time, as historically, stocks outperform fixed income options like bonds. 

ZGRO is professionally managed by BMO’s very own Global Asset Management Team, which means you will have their experience and expertise on your side. The bulk of ZGROs assets lie in BMO’s US and Canadian S&P composite ETFs, which generally fare very well over time.

ZGRO also gives you geographic diversification, with holdings in North America, Europe, Asia and beyond.

As far as fixed income assets, ZGRO contains bond ETFs such as BMOs Aggregate Bond Index ETF and its Government Bond Index ETF.

ZGRO Holdings

ZGRO has a total of 10 holdings. As of writing, ZGRO consists of 80.73% stocks, 19.26% fixed income, and 0.01% cash and cash equivalents.

Each quarter, ZGRO is automatically rebalanced to achieve optimal balance in terms of its 80/20 weighting as well as to ensure that only the top performing assets are included in the ETF portfolio. ZGRO also pays out distributions quarterly, which you can take out in cash or automatically reinvest.

Let’s take a look at ZGRO’s holdings and weightings of each of its ETFs.

zgro etf asset allocation
Source: bmogam.com

As you can see, a bulk of ZGROs holdings consist of BMO’s S&P 500 Index ETF, which has a 5-year return yield of 12.48%. In addition, its S&P/TSX Capped Composite Index ETF has a 5-year return yield of 8.80%. 

Those are some pretty solid returns!

On top of great diversification in terms of asset allocation in terms of sectors represented within ZGRO’s holdings, it also offers solid geographic diversification. This is always something to look for in any ETF investment because it helps to shelter you from potential losses you could incur if only investing in one geographic area.

zgro geographic allocation
 Source: bmogam.com

ZGRO ETF Performance

Like most all-in-one ETFs in Canada, this one hasn’t been around long enough for a full picture of how it might perform in the future. However, based on the performance of its current assets, and understanding that ETFs in general have a solid track record, our bet is that this investment will pay off in the long run.

Since its inception in 2019, even through a time of worldwide economic trouble, ZGRO has produced gains. If you had invested $10,000 when it first launched, you’d still be in the black because of its 10.66% return in 2020. 

Check out the chart below to see how well your 10 grand would be doing so far:

zgro growth graph
Source: bmogam.com

To see how ZGRO’s performance compares to other popular all-in-one ETFs, check out our VGRO ETF Review as well as our VEQT ETF Review.

ZGRO ETF Investment Accounts for Canadians

ZGRO is eligible for a number of account types:

  • RRSP
  • RRIF
  • TFSA
  • RESP
  • Non-Registered Account
  • DPSP

Although BMO’s ZGRO does offer geographic diversification, the fact that the bulk of its holdings are largely Canadian based, this could reduce your tax liability in the long run, which could work in your favor. Always check with your accountant to understand how your earnings will be taxed, and discover how to maximize tax savings.

ZGRO ETF Fees

Like many of its ETF and all-in-one ETF counterparts, ZGRO has a low Management Expense Ratio (MER) of 0.20%. It’s pretty impressive that they are able to keep costs so low considering that it is in fact actively managed by BMO’s own expert asset management team.

You might think that a robo advisor, which also offers a wide selection of low cost services and automatic rebalancing would come at the same price as an all-in-one ETF. In fact, a robo advisor ends up costing you more for a comparable service. 

As a comparison, Wealthsimple’s robo advisor service will cost you double in fees, at their tired MER of 0.40% and 0.50%. 

So, for what it offers, ZGRO is definitely a good bargain.

How to Buy ZGRO ETF

You can easily purchase shares of ZGRO from any online brokerage. If you have an InverstorLine brokerage account with BMO, you can trade ZGRO for free. read our full BMO InvestorLine review first.

If you don’t have a BMO account, it’s not a problem. You can use your current brokerage account to purchase shares of ZGRO, which at the time of writing are trading at $33.74. 

If you’re in the market for the best low cost discount brokerage in Canada, we recommend our top pick Qtrade. Check out our full Qtrade Review to discover why we think it’s Canada’s Best Broker. 

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ZGRO ETF Review: FAQ

ZGRO ETF Review: Final Thoughts

BMO has a long history of solid asset management, giving their customers solid returns over the years. In that regard, you’ll be in good hands if you decide to invest in ZGRO.

For investors who value having a safety net to shelter you from stock market volatility, ZGRO’s 80% stock and 20% bond asset split may give you peace of mind and protection.

If you are new to the world of all-in-one ETFs, or even wondering if investing only in ETFs is a smart financial move, you can check out our full rundown on the topic in: Can You Invest Solely in ETFs?

If you are ready to jump into the world of ETF Portfolios and want to know our take on the Best All-in-One ETFs in Canada, we’ll give you the full rundown so you can dive in!

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