Hot articles on ETFs

A recent BlackRock report reveals the global exchange traded product industry recorded its best Q1 on record, amassing flows of $70.1 billion compared to the previous record of $65.5 billion in 2012.

Clients want to know what ETFs are and what role they can play in their portfolios. Use these articles to help round out your understanding of how ETFs work:

Are ETFs cheaper?

As ETF assets grow, there is pressure to reinvent the wheel. It’s natural because many investors don’t want just beta. They may want dividends; they may want low volatility; they may want enhanced indexing. There is, for example, now a covered-call ETF on BRIC countries.

ETFs fit the bill for fixed income allocation

Fixed-income ETFs hold significant potential for institutional investors, who are using them in increasingly sophisticated ways. The fixed-income ETF market includes diverse sectors that allow investors to enhance portfolio performance, mitigate risk and improve efficiency. Plus, the liquidity that fixed-income ETFs can achieve, along with two-sided pricing transparency, is attractive to investors looking to gain expedient, tactical exposure.

Use ETFs to hold your cash

Sitting in cash is rarely a good investment strategy. So what’s the alternative?

Too much of a good thing?

As the ETF industry burgeons, the original premises of indexing are in danger of being swamped. What were those original premises? Simplicity was one, and so were cost-effectiveness and tax-efficiency. The idea was to track as broad an equity index as possible.

Using ETFs in retirement

As baby boomers retire, more focus on investment income is needed. The objective is simple: “don’t let me run out of money.” There is no substitute for spending less, but this is an unsatisfactory answer for most.

Advisors must understand risks of certain ETFs

Against the backdrop of a struggling Canadian mutual-fund industry, which is in net redemptions once again, ETFs are a success story. Not only are they gathering assets, they’re also putting new strategies into accessible packages.

Safety tips for synthetic ETF use

Derivatives offer useful and cost-effective ways for investors to manage risks. In the ETF world, derivatives have democratized investor access to asset classes like commodities and currencies, and to strategies like covered-call writing, use of leverage and short selling.

The easy way to calculate ACB for ETFs

Are your clients pulling their hair out trying to calculate ACB? It can be tedious and time-consuming, but there’s a simpler way.