In Canada, the current market cap weighted nature of many indices and funds provides significant concentration risk for investors today. This is a newfound global phenomenon many have linked to the rise of Exchange Traded Funds (ETFs), however, this trend ought to be considered when choosing stocks, domestic or otherwise.
In this article, I’m going to discuss one global technology ETF I think provides Canadian investors with the right mix of growth and diversification: the TD Global Technology Leaders ETF (TSX:TEC), one of my favourite ETFs for Canadian investors for multiple reasons.
The fund’s provides broad global diversification to Canadian investors outside of Shopify Inc. (TSX:SHOP)(NYSE:SHOP). Also, the fund gives a nice currency hedge for Canadian portfolios that are heavily concentrated domestically. The companies included in this fund are the leaders in their respective categories and largely of the large-cap, blue-chip variety.
This dramatically improves the ETF’s risk adjusted returns relative to other technology ETFs covering small caps and has resulted in some pretty impressive capital appreciation of late as big tech has dominated the investment landscape for quite some time.
Those looking for growth ought to consider a global option such as this ETF, a fund I highly recommend for Canadian investors.
Invest wisely, my friends.
