Is This The Only ETF You Need?

One of the mistakes many investors make is over-analyzing their ETF choices. They may choose a dozen ETFs when just a few would do an equivalent job. Or they might switch out of a product to save a small amount in fees. Fees don’t make much difference when an investor is first starting out.

One simple ETF that offers a great amount of diversification is the BMO MSCI World All Country High Quality ETF (TSX:ZGQ). The ETF seeks to invest in high-quality stocks around the world that consistently deliver high returns on equity, steady earnings growth, and low financial leverage.

In other words, it tries to identify the best stocks around the world and put its capital to work in those names only.

While the ETF is relatively small -- it has just 1.21 million shares outstanding and a market cap barely over $32 million -- it’s incredibly diverse. ZGQ currently owns 341 different stocks across more than a dozen nations across the world.

Naturally, most of the fund’s case is in the United States. Approximately two thirds of assets are invested in U.S.-based companies, but keep in mind, these companies have worldwide operations. Largest holdings include Apple, Microsoft, Johnson & Johnson, and both classes of Alphabet shares.

This fund offers more than just U.S. exposure. Other top holdings include Roche Holdings and Nestle (both headquartered in Switzerland) and Tencent Holdings (which trades in Hong Kong).

ZGQ offers a management fee of 0.51%, which is a little high versus ETFs that track the S&P 500, but not excessively so.