Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

There was an outbreak of common sense investing last month. Keep up the good work, everyone.

The six most popular exchange-traded funds in July were all core products that track widely followed stock indexes. These ETFs are cheap to own, easy to understand, totally liquid and, on the whole, ideal for portfolio-building. Mixed intelligently into a diversified portfolio, any one of these six funds is a sturdy foundation for successful investing.

What's notable about these six basic ETFs is that they were the most popular products in a field that is continually being expanded through the addition of new products. The theme of many of these new products is that they're not traditional index funds, like the six top sellers of July. Instead of weighting stocks according to their market capitalization, or size, they apply a screening process that results in a different portfolio than the index. Some stocks may be weighted higher or lower than the index, and there may be different sector weightings.

Story continues below advertisement

These new ETFs go by a lot of different names, one of the most recent being "smart beta." What they all have in common is the idea that there's a smarter way to invest than simply buying the major benchmark stock and bond indexes as they are. Some of these ETFs have done well, notably the fundamental funds in the iShares family. But a lot of the new ones are as yet unproven through a full stock market cycle of bull and bear markets.

The promise of index investing through ETFs is not that you'll own the smartest investments. Rather, it's that you'll make what the market makes, minus a tiny fee. Each of the six best sellers of July exemplifies this approach:

The BMO S&P 500 Index ETF (ZSP): Tracks the S&P 500 index.

The BMO S&P/TSX Capped Composite Index ETF (ZCN): Tracks the S&P/TSX composite index.

The iShares Core S&P 500 Index ETF CAD-Hedged (XSP): S&P 500 exposure.

The BMO S&P 500 Hedged to CAD Index ETF (ZUE): Another S&P 500 choice, this one with currency hedging.

The iShares Core S&P/TSX Capped Composite Index ETF (XIC): Another option for buying the Canadian market.

Story continues below advertisement

The Horizons S&P/TSX 60 ETF (HXT): Offers exposure to the 60 biggest, most liquid Canadian stocks.

There are nuances to these ETFs that you should investigate before buying. What they have in common is that they allow you to cheaply invest in a major stock index, straight up. That may not be the trendiest way to invest, but it is common sense.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies