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Me and My Money

Capitalizing on a global outlook Add to ...

Vikash Jain, 42

Occupation: Portfolio manager in Toronto

Portfolio: Consists of exchange-traded funds and exchange-traded notes: iShares S&P TSX 60 Index , WisdomTree India Earnings Index , iShares DEX Short-term Bond Index and iPath S&P 500 VIX Short-term Futures .

The investor

After graduating from the University of Toronto in 1991, Vikash Jain worked as a business correspondent in Asia for CBC, Dow Jones and other news services. In India, he "got into some IPOs on the advice of his cousin and had some success."

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Mr. Jain returned to Toronto in 2001 to work on Bay Street. Two years ago, he founded archerETF Portfolio Management, a wealth-management firm. Along the way, he obtained a graduate degree in finance from the National University of Singapore and the Chartered Financial Analyst (CFA) designation.

Prefers ETFs

Mr. Jain prefers owning ETFs instead of individual securities. "They make investment decisions simpler, give me cheap access to foreign markets, and make for a flexible, low-cost portfolio."

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His approach

He is an active investor and combines a top-down approach with a global outlook. "I look at macroeconomic factors like GDP growth, interest-rate spreads, and other indicators to identify opportunities.

"I prefer country-level ETFs, although I will buy specific sectors," Mr. Jain discloses. He also checks to see whether an ETF meets certain criteria such as a low expense ratio, and if the companies in the ETF basket have reasonable valuations and debt loads.

"I bought the WisdomTree India ETF in February, 2009, because India had little exposure to the U.S. credit crisis and was the least dependent on exports to developed markets." The government also "had the will and capacity for major stimulus spending."

"My investment horizon is six to 12 months," he reports. "But these days, you have to respond to extreme events." Indeed, he recently shifted out of most of his equity positions into the iPath S&P 500 VIX, an ETN that tracks market volatility and which rises during downturns. (An ETN is bank-issued debt that tracks the returns of asset classes.)

This portfolio move was prompted by bearish readings on indicators he follows. Notably copper, lumber, the Dow Jones Transportation Index, the Baltic Dry Shipping Index and Chinese stocks were all down to, or below, their 200-day moving averages.

Best move

"Buying the India ETF in February, 2009."

Worst move

"Buying Citibank in March, 2008, when it was 50 per cent off, only to have it go to 98 per cent off."

Advice

"Don't ignore emerging markets."

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