When looking at the make-up of most portfolios that financial advisors build for their clients, investment funds – namely mutual funds and exchange-traded funds (ETFs) – still play a massive role.
In many ways, that’s evident from recent Investment Funds Institute of Canada data. Total mutual fund and ETF assets under management (AUM) totalled $1.75-trillion and $250.1-billion, respectively, at the end of November.
But while mutual fund AUM still dwarfs that of ETFs, inflows into the latter were on pace to surpass those of mutual funds for the third year in a row, as ETFs are becoming the go-to investment vehicle for many Canadian advisors and investors.
Nevertheless, mutual funds still have a key place in portfolios – and will continue to do so. Here are 10 articles on investing strategies using mutual funds and ETFs that were published on Globe Advisor this past year:
Betting on an economic recovery may be difficult for investors, given the rising number of COVID-19 cases in North America and new lockdowns in Europe. However, with a safe coronavirus vaccine on the way and China’s economy gaining strength, there’s room for optimism. We asked Daniel Straus at National Bank Financial Inc., David Kletz of Forstrong Global Asset Management Inc. and Alex Bryan of Morningstar Inc. for their top exchange-traded fund picks to play a post-pandemic recovery.
ETFs that offer juicy distribution yields have proliferated amid paltry interest rates over the past decade. Namely, Canadian-listed covered-call ETFs have grown to 66 offerings totalling $8-billion in assets under management. Although earning extra cash on top of dividends by using an options strategy may be tempting, investors need to mindful of the risks in owning these equity or commodity ETFs – and that they aren’t always the best choice for everyone.
Robots have been getting attention recently as health-care systems worldwide look for ways to cope with the COVID-19 pandemic. Specifically, robots are being used to clean hospital rooms and operating theatres, disinfect public areas and take temperatures and pulse as well as free up maintenance and medical staff for other tasks. For investors, it’s an area of opportunity as their uses are also expanding in sectors such as manufacturing and in e-commerce.
Liquid alternatives funds – known as “liquid alts” – have been available to Canadian advisors and investors for just more than a year, but they have spared no time adding these products to portfolios. Driving liquid alts’ popularity is their ability to offer alternative strategies such as short-selling, derivatives, leverage and others that were previously available only via hedge funds to qualified, typically high-net-worth clients, to a wider audience through a mutual fund or ETF.
ETFs are among the fastest-growing financial products in Canada, driven by advisors – both human and robo – as well as interest among retail investors. It has now been 30 years since the first ETF – Toronto 35 Index Participation Units, which were known as TIPs and tracked the TSX 35 index – was listed in Canada on the Toronto Stock Exchange. They have reshaped how advisors put portfolios together, including a shift away from individual stock picking and toward low-cost, diversified funds as part of a broader wealth-management offering.
Tom Bradley, chief investment officer at Vancouver-based Steadyhand Investment Funds Inc, which manages more than $900-million in investments for more than 3,000 Canadians and has a reputation for transparency, simplicity and low-fee equity and fixed-income mutual funds, has a strong opinion on how investors should prepare themselves for what lies ahead. “It’s a pretty boring answer,” says Mr. Bradley, who co-founded Steadyhand in 2006. “Stay diversified – and I mean really diversified.”
Platform-traded funds (PTFs), which launched in mid-2016 as hybrids between mutual funds and ETFs, are slowly showing up in more investors’ portfolios amid growing pressure for advisors to offer low-cost investment funds with an active management component. Yet, the relatively new hybrid investment fund still needs time to prove itself – and a wider selection of products – to attract more interest from financial professionals and investors.
In the world of thematic ETFs, recent offerings are aiming to ride the COVID-19 tailwind. But while hot trends may be enticing, investors need to tread carefully before buying niche ETFs to avoid overexposure to stocks they may already own – or wind up in money-losing funds. The benefit of thematic ETFs is that they can give exposure to names not represented in broad market indexes and also reduce risk from making “a bet on a single company,” says Daniel Straus, vice-president of ETFs and financial products research at National Bank Financial Inc.
Liquid alts have only been available to many Canadian advisors and their clients since January 2019, but it hasn’t taken long for these products to prove their worth in investment portfolios. Their recent strong performance in March, when stock market losses were at their deepest, is likely to lead to increased demand among advisors and investors who seek all-weather returns, downside protection and diversification from traditional asset classes such as stocks and bonds.
Decentralized cryptocurrency assets are still in their infancy and prone to hyper-volatility. Nonetheless, institutional and higher-net-worth investors are starting to pay attention to bitcoin for portfolio diversification. “We look at it as digital gold,” says Arthur Salzer, chief executive officer and chief investment officer at Northland Wealth Management Inc., a family office and advisory firm in Markham, Ont. “It’s a valuable addition as an alternative asset like private equity, private real estate and private debt. We also own physical gold through a Canadian fund.”
MMJ Group to broaden investment portfolio beyond cannabis sector – Proactive Investors USA & Canada
MMJ Group Holdings Ltd (ASX:MMJ) OTCMKTS:MMJFF) (FRA:2P9) will broaden its existing investment mandate to include strategic investments in sectors outside cannabis as approved at the company’s annual general meeting held in November 2020.
These sectors include, but are not limited to natural resources, pharmaceuticals and software services technology, which will comprise no more than 25% of MMJ’s total consolidated assets at the time the investments are made.
Increased flexibility to create growth
The diversification provides MMJ with increased flexibility to create growth and greater returns for shareholders and thereby allows MMJ to lower its investment risk and reduce the impact of market volatility from the cannabis sector to ultimately benefit shareholders.
This month, the investment manager of MMJ’s investments, Embark Ventures Inc, changed its name to Parallax Ventures Inc.
Parallax has been engaged by MMJ in this role assets since June 1, 2019. There have been no other changes to personnel or operations of Parallax.
Under the amended investment manager agreement, Parallax continues to be responsible for the identification, transacting and review of possible investment opportunities in the cannabis and now the non-cannabis sector.
Portfolio of investments
MMJ owns a portfolio of minority investments and was initially established to seek investments across the full range of emerging cannabis-related sectors including healthcare, technology, infrastructure, logistics, processing, cultivation, equipment, and retail.
VIISA Hold Virtual Investment Day For The First Time – Yahoo Finance
HO CHI MINH CITY, Vietnam, Jan. 18, 2021 /PRNewswire/ — On 7 January 2021, VIISA organized Investment Day Batch 8 on its online platform, attracting more than 80 investors as well as corporations and startup community builders. This invite-only event also marked a new milestone for tech-startups Batch 8 in their 4-month journey with VIISA.
Taking place online for the first time, Investment Day Batch 8 solves the problem of geographical distance as well as difficulties in the global context of the COVID-19 pandemic, providing opportunities for startups and investors to share and exchange the latest updates about startup ideas. The event was divided into 2 sessions: live-streamed pitching shows from startups and networking activities between founders and investors with separate rooms for each startup team.
Opening the event, Mr. Vo Tran Dinh Hieu – Board Member and Program Director at VIISA, said: “Unlike any other, we want to preserve the excitement of live pitching, so this is not a recorded video, we have all the founders here with us and they are ready to go. So it is the first week 2021 and it seems like we will have another very eventful year. The UK announced 3rd lockdown, the Capitol Hill was taken yesterday. But still in Vietnam thousands of people gathered for fireworks shows on new year’s eve. I believe this tranquility in Vietnam represents what everyone has achieved in the last year. We all have sharpened our adaptability and agility to maintain the composure of our businesses. I hope we all will carry on this great attitude forward to 2021. We started this batch in June 2020 with 3 companies and only one succeeded to graduation. During this batch, we also continued supporting the alumni to recover from the covid situation.”
This year’s Investment Day is not only an opportunity for VIISA Batch 8 startups to demonstrate their maturity, but also a chance for alumni startups who have participated in previous courses to reconfirm their development and position in the startup ecosystem. Whether the startup model is about real estate, fashion, events, e-commerce, technology, and applicability factors are all of the program priorities. With the hope to help young Vietnamese startups build their global business, these are special features that VIISA always appreciates.
Pitching in the event are 5 startups:
CYHOME: CyHome is Vietnam’s leading Property management platform that has already served top-tier customers in the field of Property management (PM) such as CBRE, Proman (Novaland), Visaho, Blue Diamond, My House… With an affordable fee, PMs now can have a world-class ERP, and service providers can have a better way to serve customers. What the startup wants to bring to market is a new way of living and working in crowded cities: with no fee, the resident/tenant should have a premium experience.
DROBEBOX: Drobebox is a disruptive fashion tech startup that offers a clothing subscription service for women. Users could unlock their dream closet, which contains thousands of premium designs with a fixed monthly fee, and enjoy any items without buying, maintaining, or laundry. Starting at 30$ per month, members could explore and enjoy up to 30 new items every month that used to cost them 1000-3000$. Using state-of-art technology such as AI, Drobebox platform provides an “infinity” closet with a true personalization experience that helps dress best every day as simple as ordering food delivery.
WISEPASS: WisePass is a lifestyle app enabling its subscribers to access products, services, or events sponsored by brands. Starting from 239,000 VND per month, a subscriber gets 3 PASS a day to enjoy anything brands provide on the platform.
VDES: VDES is the very first marketplace of the event industry, which connects event venues & event suppliers to customers in the simplest way with advanced technology. During over 4 years of operation, VDES has been partners with more than 520 vendors and organized more than 2250 events for users (customers & cooperate). With technology solutions and event-ecosystem platform, VDES offer service to vendors to increase competitive advantage, increase business efficiency, and decrease operating costs by event management system, we will launch this SAAS in 2021.
ECOMEASY: EcomEasy Asia (ECE) is a dynamic ecommerce solution provider for consumer brands in Vietnam. ECE’s integrated capabilities encompass all aspects of the e-commerce value chain from SKU selection, sales and inventory management to on-site operations, logistics and fulfilment. ECE has generated billions of VND in sales and hundred thousands of orders on all 10 ecommerce platforms operating in Vietnam for a dozen of brands.
The representative from VIISA hopes that Investment Day will provide Vietnamese startup community with many opportunities to connect and exchange knowledge, which contribute to awakening the potential of domestic businesses and open up more opportunities to promote Vietnamese startups
At the end of Investment Day Batch 8, Mr. Hieu also called for startups to apply at www.viisa.vn to capture opportunities for companionship and support from VIISA.
Established in January 2017 by FPT Ventures and Dragon Capital, VIISA is an acceleration program and seed-stage fund that invests to build global-ready startups from Vietnam. After 7 batches, there have been 40 graduates, in which some startups have successfully called for US $5.5 million committed deals from investors.
Securities Commission shares investment red flags for 2021 – Airdrie Today
The Alberta Securities Commission (ASC) has released a list of top investment risks in hopes of helping Albertans avoid falling victim to scams in 2021.
“We want to protect people from the scammers and fraudsters that unfortunately exist out there,” said Hilary McMeekin, director of communications and investor education with ASC.
McMeekin said fraudsters capitalize on people in any way they can, even if that means committing scams during the pandemic.
“They prey on our vulnerabilities,” she said. “We have seen an increase in activity when it comes to fraud services or products around the pandemic.”
In early January, the ASC released a list of six tips that McMeekin said will “arm Albertans with timely information to stay vigilant and protect their finances as we enter 2021.”
The first red flag on the ASC’s list involves investments related to COVID-19. According to an ASC press release, a common way fraudsters take advantage of global events is through “pump-and-dump schemes,” which promise an opportunity to invest in new products or services that will prevent, detect or cure COVID-19 – or otherwise aid in the fight against the virus.
These pump and dump schemes usually involve artificially inflating the price of a penny stock shell company through issuing false and misleading positive statements, according to the release. The price of the stock rises as people invest. However, the wrongdoers cash out their stock at a high price before the truth is revealed, and the price of the stock then falls dramatically, leaving investors with nothing.
Another scam ASC warns about is any investment that promises great expectations. According to McMeekin, the ASC has seen an increase in situations where investment is encouraged with the promise of high returns resulting from a proposed deal involving a letter of intent.
“Proposed deals can fall through, so if it’s being promoted as a sure thing, investors should be wary,” she said.
Affinity fraud, according to McMeekin, is another scam people should be on the lookout for this year. McMeekin said affinity fraud happens when victims are introduced to scams by someone they know, such as family members, friends or co-workers.
“Fraudsters will often target ethnic communities, religious organizations, social clubs or professional groups, taking advantage of the trust and relationships that exist within,” she said. “The fraudster becomes part of – or pretends to be part of – the community, flaunting their success or wealth and often enlisting unsuspecting ambassadors to spread the scheme to make it seem credible. Friends and family may unknowingly fall victim and encourage others to invest, too.”
Also on ASC’s list is a scam that promises quick profits by trading stocks at home. McMeekin said a lot of trouble can be avoided by just properly researching these promises.
“Research the company, research whatever the investment is for,” she said. “Really look into and understand what that product or service is all about. Learn as much as you possibly can.”
Particularly during a recession or pandemic, people can be interested in earning additional income. According to McMeekin, taking the time to research the validity of various money-making opportunities can save people a lot of hardship down the road.
“Take that time,” she said. “Our hard-earned money is worth taking the time to do the research.”
Quite often, McMeekin said, when scams are reported, the companies or persons involved have not been registered with ASC.
“The first question isn’t ‘are you registered?’ but it should be,” she said. “If they are not registered, that is a red flag.”
The ASC has a website, checkfirst.ca, which McMeekin said can help people find out if companies they plan on dealing or investing with have taken necessary steps to register with the commission.
“It’s a website that is full of unbiased and free resources for investors,” she said. “No matter what stage of investing someone is in, it can be helpful.”
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