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There's a faint whiff of performance-chasing in the list of the top-selling exchange-traded funds for the first quarter of 2014.

U.S. and international market ETFs account for six of the Top 10 sellers, with the BMO S&P 500 ETF (ZSP) ranking first with inflows of $274-million. Also on the list are the Vanguard U.S. Total Market ETF, the Vanguard FTSE Developed ex North America Index ETF and the BMO MSCI EAFE ETF. It's great to see Canadian investors embracing global markets. For far too long, we suffered from quite the worst case of home bias as investors.

There's no question that many investors are still too Canada-centric in their portfolios, so a continued move into global markets does make some sense. But let's keep some perspective on how these markets have performed relative to our own Canadian stocks. In the past three years, Canada has been absolutely crushed.

Check out these numbers to the end of February, 2014:

-S&P/TSX composite index: Up an annualized 3.2 per cent
-S&P 500 index: Up 19.4 per cent in Canadian dollars, 14.4 per cent in U.S. dollars
-MSCI EAFE Index: Up 11.9 per cent in Canadian dollars, 8.5 per cent in local currencies.

The Canadian market has issues – we're roughly one-third weighted to commodities, which have shown some life this year but over the longer term have been dead weight. We're also tragically light on technology, which has been a big source of strength in the U.S. market. The net effect is a stock market that hasn't had its fair share of the big gains of the past three years.

Some guidelines on deciding whether to put money in Canada or U.S. and international markets.

Buy Canada if:
• You've done very well with U.S. and international exposure lately and want to reduce its dominance in your portfolio;
• You're a patient investor willing to be wrong for as long as a year or so before you're right ;
• You understand that market returns eventually revert to the mean, which suggests Canada will rise and the U.S. and international markets will lose momentum.

Buy U.S. and international if:
• You're way over-weighted in Canadian stock market exposure;
• You feel the improving U.S. economic outlook will drive further stock market gains;
• You take a long-term view and won't mind short-term declines.

One last thing about global investing: If you're using funds, go with unhedged products. Hedging is for times when the Canadian dollar is strong and getting stronger. In other words, different conditions than we're seeing today.