Investors who don't know where to start with investing in this rather turbulent time may be looking for a highly diversified Exchange Traded Fund (ETF) to take advantage of this market turmoil. The question then becomes: which ETF to pick?
There are a range of index ETF tracking indices around the world from the TSX to the Dow, NASDAQ, Russell, FTSE, Nikkei and dozens more. There are also a range of global ETFs which hold these individual ETFs to allow for maximum exposure to nearly every global market for investors seeking true global exposure.
For those who want to stay within North America and want to maximize their rebound from this recession we appear to be hurling perilously into, I would recommend the iShares Russell 2000 ETF (TSX:IWM).
This ETF tracks the Russell 2000 index which is a lesser-tracked index, due to its holdings which are comprised of companies with smaller valuations than those held in the Dow Jones, or the S&P 500 i.e. 500 stocks versus 2000.
The Russell 2000 has generally underperformed the Dow, NASDAQ and S&P 500 during this bull market (most of the gains came from the largest companies, notably the “FANG” stocks), but I expect the Russell to outperform on the way out of this recession as smaller cap companies typically gain more ground relative to their behemoth counterparts in these scenarios.Invest wisely my friends.
