Where to Park Your Cash - Short-Term Investing Explained with BMO ETFs

Not sure where to park your cash other than a high-interest savings account or GIC? What about ETFs? In this video, I walk you through another way to put your cash to work so you can beat potential inflation but also have a safe place to put it for your short-term goals by investing in money market ETFs like ZMMK and short-term bond ETFs like BMO's ZST, ZUS.U and ZUS.V.
This video is sponsored by BMO Exchange Traded Funds. I (Jessica Moorhouse) was compensated under this arrangement by BMO ETFs.
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CHAPTERS
00:00 Introduction
01:00 Inflation and interest rates
02:58 Other options for your cash
03:50 Money market ETFs
05:14 What about GICs?
05:58 Short-term bond ETFs
RESOURCES
📌 BMO ETF Centre: tinyurl.com/9th9svbt
📌 ZMKK: tinyurl.com/2tfy3shm
📌 ZUS.U: tinyurl.com/37vtmd2x
📌 ZUS.V: tinyurl.com/29cn4eb6
📌 ETF Market Insights: etfmarketinsights.com/
📌 ETF Market Insights YT Channel: / etfmarketinsights
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ABOUT ME
I'm Jessica Moorhouse, an award-winning money expert, Accredited Financial Counsellor Canada®, speaker, TV personality, and host of the More Money Podcast. I'm based out of Toronto, ON, Canada and turned my personal finance blogging side hustle into a financial education business that has helped thousands of people take control of their lives by taking control of their money. To learn more, check out my website jessicamoorhouse.com
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DISCLAIMER & DISCLOSURE
The content I produce is for education and entertainment purposes only. Nothing on this KZbin channel, my website or affiliated channels should be considered financial, investment or legal advice, or an endorsement for any type of service, product, or brand. Some links in this description may be affiliate links in which I may earn a commission at no extra cost to you. Please read my disclaimer to learn more: jessicamoorhouse.com/disclaimer/
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Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus of the BMO ETFs before investing. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated.
For a summary of the risks of an investment in the BMO ETFs, please see the specific risks set out in the BMO ETF’s prospectus. BMO ETFs trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination.
BMO ETFs are managed by BMO Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal.
This Instagram Reel is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Particular investments and/or trading strategies should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance.
The viewpoints expressed by Jessica Moorhouse represents their assessment of the markets at the time of publication. Those views are subject to change without notice at any time. The information provided herein does not constitute a solicitation of an offer to buy, or an offer to sell securities nor should the information be relied upon as investment advice. Past performance is no guarantee of future results. This communication is intended for informational purposes only.
®/™Registered trademarks/trademark of Bank of Montreal, used under licence.

[@davidchen253]

Great content. It is a safe and higher yield earning place to park money from Stock market temporarily. Very flexible in and out. Thank you Jessica.

[@evadeanu1]

I learned about you from Canadian in a t-shirt. Subscribed.

[@jessicamoorhouse]

Love that guy! He's the best!

[@JamesRifle]

Great video and love your content! In future I think it may be valuable to define what short term means, especially considering this fluctuates drastically for different people depending on a variety of factors. Being a new investor myself sometimes I find these open-ended or generic terms to be confusing.

[@jessicamoorhouse]

Great comment! For short-term, that is generally any goal in which the target date is within 1-3 years.

[@vancouverdiaries738]

Jessica fans here!

[@jessicamoorhouse]

Woohoo!

[@grosporcmartin]

You buy a bunch of gently used 2001 civics and you park em

[@jeffvernon9469]

Yep, better than this blabbering video that really tells you nothing lol 🤷‍♂️ zmfk? Edu? Lol

[@garymacdonald2596]

I just discovered your channel and love the content. Thanks! You've just earned a new subscriber 😃Is it possible for the distributions to be automatically reinvested in any of these ETFs to avoid a taxable event? I'm looking for a place to park some money for next year but I don't want the income as I'm trying to minimize my income next year to a large capital gain I'll have

[@jessicamoorhouse]

No, you'll always be taxed on receiving dividends (save for them being sheltered inside a TFSA or RRSP) but you can set up a DRIP (dividend reinvestment plan) with most discount brokers so new shares are purchased automatically. Here's an example www.questrade.com/learning/platform-tutorials/how-to-set-up-drip/drip-dividend-reinvestment-plan

[@garymacdonald2596]

@@jessicamoorhouse Thanks for your response. After doing a little more research, I found the Horizons Cash Maximizer ETF (HSAV). It seems more tax efficient than the other money market ETFs as it doesn't pay a distribution but instead increases in value so you'd have to sell it when you need cash and incur capital gains tax instead of interest income. Just wondering if you're familiar with this ETF and if yes, what are your thoughts?

[@jessicamoorhouse]

@@garymacdonald2596 You may want to read this horizonsetfs.com/press-release/horizons-cash-maximizer-etf-suspends-new-subscriptions-after-reaching-approximately-2-billion-in-assets/

[@sridhara8903]

@jessicamoorhouse I just bought some HSAV last month. They are now at 2.2B AUM. May be ok to invest now

[@parasarorain]

Hey Jessica great content! One question, does it make sense to invest in ZST from FHSA account considering a short term 1-2 year view for a first house purchase. I like GICs but I am afraid if I like something within a year or so, I don't want to lock in funds?

[@jessicamoorhouse]

If you don't want to be locked in, then agreed a GIC may not be the best vehicle. In comparison, ZST may be a good option for the liquidity (easy to cash out when you want to).

[@aman888]

Love ZMMK. Almost no volatility so principal is secure. High-rate. It's a no brainer, when the market starts heading up, easy to switch back to equities.

[@EngineerInMotion]

But Management fee and expense ratio is much more than something like CASH and CSAV etfs

[@jessicamoorhouse]

It's important to point out that that's not really comparing apples to apples. ZMMK invests in fixed income issued by governments and corporations in Canada, whereas CASH and CSAV invest in savings accounts. Since are different types of securities, it would make sense if the management and fees associated with management would be different. With that said, doing a comparison, the MERs are pretty close. ZMMK is 0.14%, CSAV is 0.14%, CASH is 0.11%.

[@RoyDontHugMeImScared]

​@@jessicamoorhouseignore them. They're bots

[@ruxandrabunescu4499]

Hello Jessica, thank you for your videos! I know this is a different subject, but I would really appreciate your help. I live in Ontario and I have a YT channel and want to start monetizing. I was thinking to open a sole proprietorship under my legal name. So if I don't register it, use a personal bank account and file taxes on my personal tax form (same tax brackets), then why should one open a sole proprietorship? Can I deduct anything from the KZbin part of income? Thank you so much and Happy New Year!

[@jessicamoorhouse]

You're automatically a sole proprietor if you just use your own name. If you want to use a different "doing business as" name, that's the only reason you'd need to register your sole proprietorship. But regardless if you use your own name or register it under a different name, taxes are the same for sole props, everything is taxes are your marginal tax rate but you can deduct business expenses which you can find more info about here kzbin.info/www/bejne/qoLSh5l9iq1gY9E

[@numanshakir2]

Hi Jessica Your videos are informative, can you suggest where should I invest with small budget in 2024?

[@jessicamoorhouse]

A great question and you may not like my answer. If you're just starting out, first invest in learning how to invest before putting your money anywhere (this is so you avoid some costly mistakes). A free place to start is McGill's Personal Finance online course. Some great books by Canadians to read are Reboot Your Portfolio by Dan Bortolotti, The Value of Simple by John Robertson, and Beat the Bank by Larry Bates. As some self-promo, I also have an online investing course focus on passive investing for Canadians called Wealth Building Blueprint for Canadians. And then once you have more knowledge and confidence, the two routes I think are great for investors just starting are robo-advisors or learning how to DIY with index funds with a discount brokerage (both of which I teach in my course).

[@numanshakir2]

@@jessicamoorhouse indeed it’s a good advice, I found your course and going to watch it… thank you

[@Canadastrong1]

Planning to invest in ZQQ ETF What’s u take on this ETF which I plan on holding for 7 years.

[@jessicamoorhouse]

Considering I don't know anything about your financial situation like your goal or risk tolerance, I can't really comment. For questions like this, I always suggest working with a fee-only financial planner to get tailored advice.

[@michelefisher5171]

Hi Jessica, can you do a video on increasing our credit score? Please?

[@jessicamoorhouse]

A great idea for an updated video on that. But in the meantime, I did make this video on the topic a few years ago. kzbin.info/www/bejne/a5rNYWx5jN18nNk

[@financialresuscitationwith1409]

I really enjoy your videos and podcast however when looking at the fact sheets for these ETFs compared to a 1 year GIC, these products seem subpar😢

[@jessicamoorhouse]

Did you watch the full video where I address the difference between these ETFs and GICs? It's their liquidity. I mention how yes you can get higher rates on GICs, but those are typically non-redeemable GICs meaning you're locked in. Not great if you need access to that money within that time frame. With ETFs, you can easily sell them any time during market hours and get access to those funds more easily.

[@financialresuscitationwith1409]

I was stuck in an unusual situation last year and thankfully my GICs with EQ bank were released so that I could purchase a home. We lost the interest but I didn't pay a penalty. Probably the exception to the rule but I was very thankful for their flexibility in my situation.@@jessicamoorhouse

[@carkarlaw]

I was researching for same thing. How do you compare the money market and short term bonds with high yield dividend etfs? And would you recommend Drip on these account ?

[@ivanmolinachavarria308]

I’m using wealthsimple cash account with 4% interest, which of those ETFs will be better to by under TFSA ?

[@jessicamoorhouse]

4% is great for a cash account, but just looking at the past annual yields for some of these ETFs, ZMMK yielded 5.16%, ZUS.U yielded 5.25%, ZUS.V and ZST yielded 5.16%.

[@ivanmolinachavarria308]

@@jessicamoorhouse what about HDIV and HYLDdo you think could be another good option?

[@annestratton5787]

If I put money into my account savings and I decide to donate a go fund me can any banks still freeze my account if the government does not want that go fund me supported like what happened with the freedom convoy?

[@jessicamoorhouse]

I doubt it it, the situation you're talking about it pretty specific and as I understand it, the person whose accounts were frozen is now suing the government.

[@emmarine2027]

Any etf from other banks like Scotiabank or TD ?

[@jessicamoorhouse]

Pretty much all ETF providers offer money market and short-term bond ETFs.

[@ernie8401]

TFSA

[@jessicamoorhouse]

Well, that's just an account that you can hold cash and/or investments inside. The video is about should you leave it in cash or invest it.

[@OMARMOHAMED-rg8fn]

❤❤❤❤❤❤❤❤❤😂😂❤❤

[@Diygrl]

Are there Any Canadian ETFs that you recommend which reinvests payments back into the fund for compounded growth (such as ZUS.V does)?

[@jessicamoorhouse]

So fun fact, the ZST was actually the first of its kind in terms of accumulating units back when BMO launched it in 2017. I know BMO offers other ETFs like this including ZST.L, the Ultra Short-Term Bond ETF; ZFS.L, the Short-Term Federal Bond ETF; ZPS.L, the Short Provincial Bond ETF; and ZCS.L, the Short-Term Corporate Bond ETF. Not sure off the top of my head if other ETF providers have copied them and now do the same, but with that said, you could simply set up a DRIP (dividend reinvestment plan) for any ETF so your dividends are reinvested?

[@Diygrl]

@@jessicamoorhouse thank you for this information!

[@aman888]

Wish I knew about ZUS.U. Instead I went into SGOV and BIL.