Investors looking for exposure to U.S. financials can do so in a number of different ways. I have written in the past about buying specific Canadian banks such as Toronto-Dominion Bank (TSX:TD)(NYSE:TD) which now have more branches in the U.S. market than in Canada; investing in a Canadian bank with U.S. exposure has a number of benefits for a Canadian investor including currency exchange benefits and tax benefits.
Another way for investors to gain exposure to the broad sector, while hedging out some of the currency risk involved with cross-border investing is to buy shares of an ETF such as BMO Equal Weight U.S. Bank Hedged to CAD Index ETF (TSX:ZUB). This ETF is an excellent choice for investors looking for broad exposure to the U.S. financials sector, as it is broadly diversified, holding all of the biggest and most recognizable names as well as a gamete of smaller regional banks.
This ETF will allow investors to benefit from a potential reversal of Dodd-Frank by the Trump Administration, a reversal which remains uncertain and which would likely provide an additional bump to the U.S. banking sector, should the Trump Administration officially move forward with its legislation changes.
As a sector, U.S. banking remains fairly valued, and with a number of pending catalysts which may take the stock higher over the medium-term, this ETF provides a decent way of gaining exposure to this sector, while hedging out some of the currency risk for Canadian investors.
Invest wisely, my friends.
