Index ETFs are the investment vehicles of choice for international private investors.
Category: Portfolio Management
Categories
Choice of indices
Index ETFs meet the criteria of passive management and allow for market performance, low fees, diversification and transparency.
Your asset allocation will vary over your life cycle, and you should invest and position your overall capital differently as a young adult, mature adult and senior.
Your strategic asset allocation will be your starting point before venturing into the stock market but the coming end of expansive fiscal and monetary policy and the high valuation of U.S. growth stocks may require a different implementation of your asset allocation.
We cannot ignore the current relative valuation and future prospects of Chinese equities, despite the risks. Options, even if imperfect, remain an indirect exposure and a diversified investment in emerging markets.
We strongly recommends physical ETFs, even if in some exceptional cases, synthetic ETFs may be more appropriate in certain circumstances.
The basic rules of the markets will hold true beyond any investment model: the importance of diversification, mean reversion of returns over the long term, and the difficulty of creating alpha in public markets.
In times of low interest rates, structured products attract investors with comparatively higher returns, but there is also the threat of painful losses.
The world’s largest sovereign wealth (Norway) believes in relatively efficient markets and follows a passive approach with a 70:30 stock:bond index and little deviations.
The Canadian investment model advocates internalized wealth management and assets hedging liability and inflation (such commodity producer stocks, real estate, and infrastructure).
