Five ways to worry less about your investments with an all-in-one ETF + MORE Jan 24th

The effects of climate change are a risk to Canadians and the Canadian economy in more ways than one. There are the direct issues, like fires, floods and storms, increasing in both frequency and intensity (plus threatening lives and homes, and raising home insurance premiums, too). There are financial and economic risks as well. Not only will businesses have to account for more and more weather-related challenges—think shipping delays and shortages of products and raw materials—but they face huge potential costs in dragging their feet in the transition to net-zero.

That has implications for all of us. As the Bank of Canada puts it, “whatever path is chosen, delaying action heightens the risks to the financial sector and to the entire economy.” But thanks to a new report, Canadian investors now have greater insight into which companies are lagging.

Climate Engagement Canada introduces Net Zero Benchmark assessments

To help both individual and institutional investors in Canada make informed investment decisions, multiple industry initiatives are working to create and improve reporting on how companies approach climate and other ESG (environmental, social and governance) issues…

Equity market volatility can spook even the savviest investors into making rash decisions. Periods of pronounced market movements can spark emotional responses: buying high for fear of missing out or panic selling to cut losses.

Generally, these approaches are not beneficial for your long-term financial well-being. Emotion is the enemy of investing, goes the adage. Impulsive investment decisions can be detrimental to the long-term performance of your portfolio.

Taking emotions out of investment decisions and incorporating a professional, process-driven approach to managing your money is a good way to avoid investing missteps and misadventures.

One way to do that is through exchange-traded funds, or ETFs for short. An ETF is a basket of individual stocks and bonds, similar to mutual funds, that may be purchased for one price through a listing exchange. Investors can buy shares of ETFs, known as units, and gain exposure to the performance of securities within the ETF. ETF companies deduct a management fee as part of the ETF’s management expense ratio (MER)…

Who doesn’t love one-stop shopping? With consumers seeking faster, easier ways of investing, it was a logical next step for investment managers to develop more products that are bundled, easy to use and affordable, such as all-in-one exchange-traded funds (ETFs).

ETFs already have a reputation for being a simple and cost-effective way to obtain a diversified portfolio. They are usually actively managed, and they generally invest in passive ETFs, which can keep fees low, and investors can choose from a range of options, such as conservative, balanced or growth products.

ETFs have surged in popularity among DIY investors. While the performance of ETFs is often similar to that of mutual funds, ETFs are easy to buy and sell.

All-in-one ETFs go one step further. Essentially, they are collections of lower-cost ETFs. Investors don’t have to select, track or manage them—the pros take care of that. All-in-one ETFs can be passively or actively managed, and fund managers will rebalance the portfolio back to the strategic allocation, when necessary and if part of the ETF’s investment mandate…

Some financial experts have long stressed that cash can be a poor savings vehicle and that money should be put to work by investing. This makes sense when you consider the bite of inflation and the current environment of low interest rates.

In addition, holding cash can mean missing out on the magic of compounding—and the turbo-boost of growing an investment inside a tax-free savings account (TFSA). Despite its name, a TFSA is not just savings account, and it can hold a wide range of qualified investments, including exchange-traded funds (ETFs.)

What are ETFs?

ETFs are large baskets of individual stocks or bonds, similar to mutual funds. They come in many flavours: some track a broad market index, while others focus on a specific sector, region or factor. Unlike mutual funds, ETFs trade on exchanges, and their prices change throughout the day based on supply and demand. You can purchase shares of an ETF, known as units, through a registered dealer and gain exposure to the performance of individual securities within the fund, without owning the securities themselves…

Investing shouldn’t be all or nothing, with investors forced to choose products that solely correspond to their risk tolerance and offer little flexibility. That’s why some people take a “core and explore” (or “core and satellites”) approach to building their portfolio. With this approach, investors can allocate the majority of it—80% to 90%—to a core of diversified holdings, like broad-market index funds, and the rest toward speculative or more volatile opportunities, such as emerging sectors and cryptocurrencies.

For investors who embrace this hybrid strategy, new all-in-one exchange-traded funds (ETFs) can offer a one-ticket solution for their portfolio’s core. Many all-in-one ETFs are lower-cost investments that are bundled together so that investors don’t have to track or manage them. These products often include ETFs and pooled stocks and bonds, which are rebalanced, if the investment mandate permits.

With an all-in-one ETF as their portfolio’s core, investors can then be a little bolder with their room to explore…