Views from the Desk

Podcast: Understanding Long-Short Strategies

Oct. 1, 2025

What exactly are long-shorts? And how do they differ from traditional ETFs? In this episode, special guest Lu Lin and your host, Erika Toth, delve into the popular alternative strategy, answering frequently asked questions on benefits, portfolio construction, and more. 

Erika Toth is Director, Institutional & Advisory, Eastern Canada at BMO Global Asset Management (BMO GAM). She is joined on the podcast by Lu Lin, Head of Quantitative Investments at BMO GAM. The episode was recorded live on Wednesday, October 1, 2025.

ETFs mentioned in the podcast:

ZLSU, total returns as of 2025/08/31: 1 yr: 18.00%, SI: 22.53%

ZLSC, total returns as of 2025/08/31: 1 yr: 13.25%, SI: 20.61%

ZLSU and ZLSC Inception date: Sep 27, 2023

ZSP, total returns as of 2025/08/31: 1 yr: 17.79%, 3 yr: 20.93%, 5 yr: 15.56%, 10 yr: 14.67%

ZCN, total returns as of 2025/08/31: 1 yr: 25.76%, 3 yr: 17.40%, 5 yr: 14.92%, 10 yr: 10.79%

Beta: A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Usually, the market has a beta of 1.0. Stocks with betas higher than 1.0 are interpreted as more volatile than the market, and stocks with betas lower than 1.0 are interpreted as less volatile than the market.

Management Expense Ratios (MERs): the audited MERs as of the fund’s fiscal year.

Return (risk-adjusted): A measure of investment performance taking into consideration how much risk/​volatility was assumed to generate it. Consider two investments, both of which return 10% over a given time period. The investment with the greater risk-adjusted return would be the one that experienced less price fluctuation. Two of the most commonly used measures of risk adjusted returns are Sharpe and Sortino ratios.

Risk: All investments involve risk. The value of an ETF can go down as well as up and you could lose money. The risk of an ETF is rated based on the volatility of the ETF’s returns using the standardized risk classification methodology mandated by the Canadian Securities Administrators. Historical volatility doesn’t tell you how volatile an ETF will be in the future. An ETF with a risk rating of​“low” can still lose money. For more information about the risk rating and specific risks that can affect an ETF’s returns, see the BMO ETFs’ prospectus.

Sharpe Ratio: A risk-adjusted return measure calculated by using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe Ratio, the better the portfolio’s historical risk-adjusted performance.

Disclaimers:

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This podcast is for information purposes. The viewpoints expressed by the speakers represent their assessment of the markets at the time of publication. Those views are subject to change without notice at any time. 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. 

Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent prospectus.

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.

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