BMO Global Asset Management company is home to many of the most popular investment funds in Canada and around the world. They boast on their 149 exchange-traded funds (ETF) portfolio giving the investors the opportunity to achieve different investment goals. In this article, we will take a look at BMO Conservative ETF (ZCON) to give you an idea if this ETF suits your investment needs.

As the name of the fund suggests, BMO Conservative fund is, well, conservative or modest in its returns. Before we take issue with this, we must look at the fund’s risk rating which is all the reason why an investor opts for ETF investments over direct stock investments.

According to BMO, this Conservative fund (ZCON) has a risk rating of low. This means that your money invested will be relatively safe in its value. Or simply that there is less chance of you losing all your money. This is nothing new or specific to the fund, as all kinds of investments carry the risk of losing all your money. In such an environment, a low-risk rating is the safest scenario we can go for.

Quick Facts	ZCON.TO
Fund inception date	February 15, 2019
Net Assets (Oct 4, 2021)	$47.8 million
Exchange	Toronto Stock Exchange
Annualized distributions yield	2.51%
Management expense ratio	0.20%
Account eligibility	TSFA/RRSP/RESP/RRIF/DPSP

According to BMO, this is what investors can expect from ZCON ETF;

“designed to provide income and moderate long-term capital appreciation by investing in global equity and fixed income ETFs.”

BMO Conservative ETF (ZCON) Holdings

As BMO suggests, ZCON is a “fund of funds.” This means that ZCON actually holds 10 other broad indexed equity and fixed income funds (as opposed to investing directly in stocks of listed companies). And of course, all these holding funds belong to BMO themselves. One major benefit of this setup is that BMO is able to give the investors a low management expense ratio (M.E.R.) of 0.2% on the ZCON fund.

Holding Name	Weightage
BMO AGGREGATE BOND INDEX ETF	41.63%
BMO S&P 500 INDEX ETF	16.51%
BMO GOVERNMENT BOND INDEX ETF	11.64%
BMO S&P/TSX CAPPED COMPOSITE INDEX ETF	10.40%
BMO MSCI EAFE INDEX ETF	8.57%
BMO MID-TERM US IG CORPORATE BOND HEDGED TO CAD INDEX ETF	6.11%
BMO MSCI EMERGING MARKETS INDEX ETF	3.58%
BMO S&P US MID CAP INDEX ETF	1.09%
BMO S&P US SMALL CAP INDEX ETF	0.48%
CASH	-0.01%

These funds mark an asset allocation of about 57% in fixed income ETFs and 43% on broad indexed equity funds.

The majority of these assets are allocated in Canada (62%) but are spread geographically in United States (23%), Japan (2%), China (1.3%), United Kingdom (1.1%), and more.

BMO Conservative ETF (ZCON) Performance

We discovered that ZCON is a modest income generator for investors with respect to its low-risk rating. In the 2 years and 8 months of its operation, ZCON has been able to generate about 22% return on investment. Had you invested $10,000 at the beginning of the fund, the money would have grown to about $12,200 by October 2021.

This growth may be modest, but considering that it made a full recovery from a dip of -2.8% of all-time growth during March 2020 in the height of the COVID pandemic, this ETF has shown resilience and what ‘conservative’ really means.

Is ZCON ETF for you?

ZCON is an ETF that will protect your funds and grow them slowly over time. It gives you a modest distribution of 2.5% annually (at the current market price of $34.08). You will definitely find higher-yielding funds elsewhere and even within the BMO’s cluster of ETFs. However, if your aim is long-term growth without undertaking much risk, this fund will best fit your investment goals.

Check out the latest information about the fund on BMO.

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Disclosure: Any information given in this article is not to be construed as investment advice. You must do your own research before investing any money in the stock market. All investments carry inherent risks even with the possibility of losing all your money.