Exchange Traded Funds (ETFs)
Friend or foe? You decide, but there is no ignoring the fact that Exchange Traded Funds (ETFs) have become the bee’s knees when looking for investment options.
I am taking excerpts from the recent Intellidex ETF reviews on EasyEquities, which gives readers some valuable insights into their top Exchange Traded Fund picks and market reviews.
Here are some of the noteworthy excerpts from the article:
Local: “We maintain the CoreShares Scientific Beta Multifactor Index ETF as our pick for investors seeking exposure to local equities. The fund fits our mould of a good investment philosophy. Its methodology tends to favour quality stocks which are highly profitable - exactly what we think investors need under prevailing economic conditions.”
International: “We maintain our exposure to the broad-based Satrix MSCI World Equity Feeder ETF, which is dominated by US equities. We think US stocks are more resilient than other developed market equities during turbulence, given the relatively stronger US economy. We are, however, cognisant of the elevated US valuations relative to other developed markets. The Satrix MSCI World Equity Feeder ETF grew 6.1% in January. A good alternative, though, is the Ashburton Global 1200 Equity ETF (up 5.5%) but it has a higher total expense ratio. Other more focused international equity themes include property, dividend and technology funds. These are worth considering for tactical or other investor-specific reasons.”
Other (Fixed income and Cash): “We maintain our choice of the Satrix ILBI ETF (+0.2%), which has the lowest expense ratio in this category. Furthermore, nominal bonds add a unique risk-return dimension that differs from inflation-linked bonds and improves overall portfolio performance. The only option for local nominal bonds is the Newfunds GOVI ETF (+1.5%)”
The broad-based adoption of Exchange Traded Funds (ETFs) has been exceptional all over the globe and our clients are no exception. With some of these offerings available for Tax Free Savings (TFSA) and Retirement Annuity (RA) accounts, the influx in interest is set to continue.
What does EasyResearch say
The Intellidex research notes give the reader insights and perspective of the different offerings available across asset classes. We might expect the international ETF offerings to continue to be more attractive while the local economy contracts.
In today's hustle and bustle lifestyle, Exchange Traded Funds (ETFs) are indeed a desirable low-cost option to use when you don't have time to put in the work to analyse a market. But like everything in life, there are always two sides to every story, and ETFs are no different. Not much is ever discussed about tracking errors or even counter-party risks, so remember that a bit of diversification might not hurt.
Here is an educational piece I found on George Gammon’s YouTube channel which gives a step by step explanation on how the ETF/ Index fund market works and what to be aware of, titled “Michael Burry Predicts: INDEX FUNDS WILL COLLAPSE! (I Explain Why)” and yes, that Michael Burry the guy who predicted the 2008 financial crises.
Source – EasyResearch, Intellidex
Take note all pricing and performance was taken from the Intellidex notes.
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Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.