The ever increasing range of specific exchange traded funds (ETFs) for Canadian investors can be daunting; from sector specific, to niche funds focused on blockchain technology or cannabis producers, ETFs have evolved to become more specific in a race to meet the growing needs of a more sophisticated “do-it-yourself” investor base looking to limit fees and maximize long term upside potential.
For those looking to put a big chunk of money into the Canadian market in an ETF in a broad, diversified way – one ETF which covers a very broad range of stocks is the iShares S&P/TSX 60 Index (TSX:XIU).
This is the largest ETF in Canada, with assets of nearly $12 billion and a very low management-expense ratio (MER) of 0.18%. This fund invests in the largest Canadian companies, effectively covering nearly three quarters of the overall Canadian market, despite having only 60 core holdings.
For long-term investors, having a good portion of one’s portfolio invested in a range of companies which cover the vast majority of a given index is often the way to go.
For passive investors looking for a diversified way to invest, the iShares S&P/TSX 60 Index is one of the best options out there. The only caveat to note here is the Canadian indices tend to be heavily weighted toward energy and financials, so diversifying into global markets should also be a focal point for investors choosing this option.
That said, investing close to home is always a good idea, given the fact the TSX has lagged its global counterparts and is expected to outperform in the medium term.
Invest wisely, my friends.
