Our top ETF, Financial, Investment & Robo-Advisor specializes in leading-edge passive investment solutions for high net worth investors in Calgary, Toronto, Canada.
An ETF or exchange traded fund is similar to stocks and are traded on the stock market. And ETF is a set of assets like stocks, commodities, bonds etc and is set to follow preset rules. Passive investing is the investing strategy that tracks ETFs. Tracking an ETF requires low turnover or transactional fees, thus saving money on them. This in the long run helps the average investor to get average returns with low investment costs. People with less knowledge of the stock market looking to invest their money have an agent (to manage their investments) who will invest the investor’s money, on the basis of their risk management. The agent will be incentivized and thus manages the investor’s portfolio, for good returns, at low risks.
Advantages of passive investing:
• Low investing costs: the expenses and transactional fees of ETFs are low, hence reducing overall costs.
• Passive investing is simple to understand and doesn’t require a lot of managing on the investors end, hence less cumbersome.
• Low turnovers, as selling of the ETF resulting in gain tax will be less in mutual funds or ETFs compared to the others
• More diversification in equity portfolio.
• No style drifts, and hence lower risks. The exchange traded fund will follow the set diversifications and will not drift in the hope to get more returns.
• Steady returns to be expected, with reduced risks.
• More flexibility and transparency.
Why is diversification important?
Diversification is buying of equity in multiple sectors than sticking to just one. A more diversified exchange traded fund is said to have more number of securities of different sectors, thus reducing volatility. Volatility in the stock market increases risk, and the impact of this risk would be less in a more diversified ETF.
Robo-advisors for ETF:
Finding a good IsharesRobo-advisor is very important. They implement custom strategies to build a diversified portfolio globally within line to the clients risk tolerance and objectives. Qualitative and quantitative methodologies are used to analyze risk portfolios of clients and satisfying the investors best by performing according to desired.
Most Robo-advisors have minimum investment criteria and have a fair pricing policy. Use of technology and well understood strategies to pick securities alot assets.
ETF advisors always help investors stay in the bull market globally and avoid bear markets efficiently to avoid risks and losses. Preserve wealth from the volatility of the market and invest better.
Rebalancing the Exchange traded funds are easy and can be done if any part of the fund is heading to a bear trend. Most of the ETF robo-advisors have simple tools and can mitigate risk by a few guidelines. Some guidelines are:
• Always invest in the bull zone, and avoid the bear zone.
• Protect the loss, and have set stop losses to prevent the downside.
• Rebalance: if any of the parts of the ETF is heading to the bear zone, drop them out easily and rebalance the entire ET
• Keep rotating sectors of investment and don’t be stuck on one. This protects assets from volatility.