Home / Insurance Tips / The bear necessities: Here’s a look at some ETFs that can help during a downturn

The bear necessities: Here’s a look at some ETFs that can help during a downturn

While the performance of ETFs will be negatively affected by the indiscriminate bear, there are also ways they can provide pockets of relative outperformance even in times of distress.

This week, following renewed oil price weakness, markets reached bear market status worldwide, with the MSCI All Country World Index breaching the 20 percent decline threshold from a high set last May.

If you wonder what that means, this is actually the part of the cycle whenever your adviser hides under their desk, and also you, upon reading your account statements, assume what is known in airline lingo as the crash position.

The alternative, of course, which many people choose, would be to not read statements at all –  it probably isn’t as irresponsible because it seems, given that there is not much you can do, irrespective of what you may want to think.

Or is there?

Overall, I believe Canadian investors are facing the mother of perfect storms. On the one hand, we have fees for asset management that are one of the highest in the world, which combined with a large closet-indexing fraternity in mutual funds and investors traditionally responsible for a high “home-bias” (the tendency to take a position one’s portfolio mostly in domestic securities) are detrimental to investment success.

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