John DeGoey is portfolio manager, Industrial Alliance Securities. His focus is personal finance and ETFs.
Top Picks:
Vanguard FTSE Canadian High Dividend Yield Index ETF (VDY.TO)
VDY is a great way to get diversified exposure to Canadian dividend-paying stocks. The product is cheap, it includes a built-in value screen, since it effectively avoids growth stocks and is a good way to add a Canadian equity component to a global portfolio.
Vanguard Global Value Factor ETF (VVL.TO)
The new Vanguard VVL is a rules-based active strategy ETF that screens for value stocks around the world. It is about 50 per-cent U.S., 4 per-cent Canada and 46 per-cent developed non-North America. In other words, it's a great way to minimize home bias.
Vanguard FTSE Emerging Markets All Cap Index ETF (VEE.TO)
This is perhaps the one ETF that I recommend more than any other. It is absolutely a long-term (i.e. generational) hold, but it is a great way to create a broad stake in the one part of the world that, while volatile, is growing faster than everywhere else.
Past Picks: August 17, 2015
iShares MSCI USA Minimum Volatility Index ETF (XMU.TO)
Then: $38.04 Now: $40.64 +6.83% Total return: +8.77%
iShares MSCI EAFE Minimum Volatility Index ETF (XMI.TO)
Then: $34.03 Now: $32.96 -3.14% Total return: -1.05%
Vanguard FTSE All-World ex Canada Index ETF (VXC.TO)
Then: $30.43 Now: $28.48 -6.47% Total return: -4.57%
Total Return Average: +1.05%
Market outlook:
Cost is critically important to being a successful investor, and clients should look to build broadly-based, highly-diversified portfolios that minimize costs. Therefore, using portfolio building blocks that are cheap, pure and fully-invested in multiple-security, tax-effective strategies is critical. In addition, re-balancing should be done on a purposeful basis once the portfolio's strategic mix has been established. Applying clear, evidence-based principles is likely the best way to maximize your odds of having a successful investment experience.