Archive | August, 2016

Smart Beta ETFs: Your Complete Guide

Remember when index funds simply tracked the broad markets? I do, but I also remember renting movies on VHS and watching the Leafs in the second round of the playoffs.

Today there are ETFs tracking every conceivable segment of the market. Many are little more than flavours of the month, but one new breed is probably here to stay. Like old-school ETFs, they’re built from indexes, but they don’t simply track the whole market or a single geographic or economic sector. Instead, they focus on stocks with specific characteristics (called factors) that can be expected to lead to higher long-term returns.

For example, some of these ETFs screen for companies with low prices relative to their fundamentals (value stocks), while others cover only small-cap stocks, those trending upwards in price (momentum stocks), or those with lower volatility. Collectively these strategies have come to be called smart beta.

Consider an investor looking for an ETF of Canadian equities as part of a balanced portfolio. A traditional indexer would use a fund tracking the broad market, such as the iShares Core S&P/TSX Capped Composite (XIC), or the Vanguard FTSE Canada All Cap (VCN).

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An Even Better Reason to Fix Your Portfolio

So your portfolio is a disaster. Your RRSP is full of high-cost mutual funds, sprinkled with some random stocks and a bunch of exotic ETFs that seemed like a good idea at the time. You know it’s time to clean house, but you’re not sure where to begin. Well, here’s your chance to fix your portfolio and support a great cause at the same time.

Until last spring, Alex was a healthy, thriving four-year-old who loved playing soccer, swimming, riding his bike and playing with his two brothers. But in late April he was air-lifted from their home on Vancouver Island to the intensive care unit at BC Children’s Hospital, where he spent two weeks fighting for his life. Alex was diagnosed acute myeloid leukemia and has been receiving treatment for this disease throughout the summer.

Alex’s parents—who are clients of PWL Capital—are grateful for the excellent care their son is receiving, and they’re raising funds for the BC Children’s Hospital Foundation with the goal of helping other families dealing with childhood cancer.  My colleagues Justin Bender, Shannon Bender, Amanda Dalziel and I want to support Alex and other brave kids like him by raising $10,000 for their cause.

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