The more I research Exchange Traded Funds (ETF), the more I realized that finding ETFs to fit a specific investment goal is easy. Finding the right ETF with the right attributes and holdings, however, is a completely different story.
Take the concept of global ETFs. For example, one can easily find dozens of ETFs with global stocks today touting themselves as “the best” global ETF out there. But when one looks under the hood, they're different in many ways.
Some are currency hedged, some are not. Some are market cap weighted, others are equal weight. Some are sorted by size, region or a myriad of other factors. In this article, I'm going to discuss the Horizons Global Risk Parity ETF (TSX:HRA).
This ETF is a global ETF, but with an interesting spin. HRA caught my eye particularly given the market turmoil we have experienced lately. This ETF balances risk exposure across two different metrics, which, when combined, can be thought of as quadrants.
The two axes which are considered in this ETF are growth (low/no growth versus high growth macro scenarios), and inflation, (low inflation versus deflation scenarios), with the goal of reducing volatility as much as possible.
This ETF has done that, experiencing much shallower declines of late when the high volatility arose, making this ETF a possible candidate to investors who are allergic to volatility, to the point they don't want to step into the market at all.
Invest wisely, my friends.
