Markets

It might be a bit brisk north of the border, but at least some fixed income ETFs seem to be hot in Canada, according to moneysense.ca.

In the aftermath of around 20 years of essentially solid returns, as interest rates nudge yields up and drive down prices, bond portfolios are absorbing some body blows. the iShares Core Canadian Universe Bond Index ETF (XBB) – which missed the panel’s picks of best fixed income ETFs for portfolios – still dispenses broad exposure to investment-grade Canadian bonds.

“I’m not committed to bonds at all,” says panellist Yves Rebetez. “People are now seeing the truth in the descriptive ‘return-free risk’ that some have been pointing to for a while. This ‘return-free risk’ is a tongue-in-cheek play on that. Who wants to invest in risk, void of potential returns?”

Opting for cost efficient funds like ETFs in Canada and elsewhere, the variety of them is, well, substantial, according to wealthawesome.com. As last year wound down, there were 1,177 Canadian listed ETFs in Canada.

Canadian ETFS are available in every shape and size. Among that wide range of options, it’s key to buckle down on the best funds.

Most portfolios commonly carry fixed income or bond ETFs – particularly if risk doesn’t float the boast of those investors who are most risk repellant.

Want to talk logic? For a second? A combination of income exchange-traded funds are most, well, logical for a substantial chunk of investors.

Based on research released Monday, Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, believes that small-cap stocks have already priced in a recession and are currently de-risked. Calvasina noted that small-cap performance has been stable since January and is in a narrow trading range in comparison to large-caps. She stated, “While this doesn’t necessarily tell us that a bottom in the broader U.S. equity market is imminent, it does tell us that the equity market is behaving rationally. It has been our view for quite some time that small-caps, which underperformed large-cap dramatically in 2021, have already been de-risked and are baking in a recession.” She also pointed out the sectors that tend to perform best in the period leading up to the final rate increase in a rate-hike cycle. These include defensive sectors such as consumer staples, energy, financials, healthcare, and utilities. Calvasina wrote the sectors “tended to perform the best within the major index in the six-, three- and one-month periods before the final hikes in the past four Fed tightening cycles.”


Finsum: In a recent research note, Head RBC equity strategist Lori Calvasina believes that stable returns of small-cap stocks are due to recessionary factors already priced in.



Stash…Away we go?

It’s a great way to travel, apparently.

In order to offer a suite of diversified multi asset model portfolios, StashAway, Southeast Asia’s wealth management company, recently joined forces with Blackrock, the largest asset manager in the world, according to crowdfundinsider.com.

The portfolios were forged by Blackrock’s analytics and ETFs. StashAway will be their manager.

General Investing portfolios – through the StashAway app – abets the ability of investors to access diversified, multi asset ETF portfolios. The portfolios are optimized for risk adjusted returns over the long haul. Like a regular smorgasbord, investors have a choice of three different General Investment strategies.   

 

The StashAway supported General Investing portfolios dial in on a dual role: optimizing for long term risk adjusted returns while ensuring the risks are unrelenting. While doing the same, the Responsible Investing portfolio also optimizes for the effect of ESG.

 

And limited thinking? Ha; not around here. The third General Investing strategy, which is supported by BlackRock, is a new long term investment strategy. Its objective is handing the investor broader diversification.

 

“We’re excited StashAway’s launching portfolios powered by BlackRock’s analysis,” said Peter Loehnert, BlackRock head of ETFs and Index Investing APAC, according to hubbis.com. The partnership, he continued, will give more investors across Asia access to BlackRock’s insights and investment capabilities via StashAway’s platform. It will offer diversified and liquid ETFs as building blocks for portfolio construction, maximising the value of ETF investing.

 

 

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