On this month’s episode, we’re going to help you evaluate whether you should pick one ETF for your entire portfolio (these are referred to as asset-allocation ETFs), or if you should pick and choose multiple ETFs for your portfolio to fine-tune it based on your specific preferences.
We also talk about how to determine the asset allocation for your portfolio (the stock to bond mix), as well as how to determine how risky the ETFs that you’re considering actually are.
Last but definitely not least, we cover socially responsible investing (also known as ESG investing) to help you decide whether ESG ETFs could be a good fit for your investment portfolio, and some things to be careful about and consider, when partaking in socially responsible investing by buying these types of ETFs.
To help me with this, I’m thrilled to have Danielle Neziol back on the show. Danielle and her team actually create some of the most popular ETFs that Canadians invest in.
She works for BMO ETFs which is the largest Canadian ETF provider in the country, so we’re literally getting this information right from the source here which I’m always a big fan of.
Danielle and her ETF Research Team have put together a lot of free resources for Canadian DIY investors over the years, and because there are so many of them, I created a resources page where you can see them listed and access them easily.
They’re all free, they’re not affiliate links or anything like that, and you can check them out and start learning over at buildwealthcanada.ca/bmo
Enjoy, a big thanks to Danielle and the team for putting these together and making them available free of charge, and now let’s get into the interview.
- Listen to it on iTunes.
- Listen to it on Spotify.
- Listen to it on Google Podcasts.
- Download as an MP3 by right-clicking here and choosing “save link as” or “save as”.
Resources:
A big “Thank You” to BMO ETFs for sharing these different resources, tools and white papers with us.
If you have questions, a great spot to get them answered is over at etfmarketinsights.com as they have free weekly educational webinars where you can submit your questions and they’ll be answered live.
ETF Market Insights (Free resources, webinars, and Q&A)
BMO ETF Lookup, News and Resources: BMOetfs.com
ETF Comparison Tool (for both: Non-BMO and BMO ETFs)
BMO Asset Allocation Questionnaire
Socially Responsible Investing ETF: ZESG
More About Our Guest:
I’m excited to have Danielle Neziol on the show, who is the Vice President of the largest Canadian owned ETF provider in Canada, BMO ETFs.
Danielle has an entire Research team backing her up, researching and creating ETFs for Canadian investors. As the largest Canadian ETF provider, it’s exciting to be able to pick her brain and hear right from the source about this type of ETF investing.
Questions:
- Before we dive into the details of how to analyze and choose the ETFs that are right for an investor’s particular situation, for anybody not familiar, can you tell us a bit about BMO ETFs, your research team, and the educational resources that you and the team produce for Canadian investors?
- As one of the leaders in this space, and as the largest Canadian ETF provider, I’m sure you have your hand on the pulse on what has become popular with Canadian investors. Can you tell us about that
- I think once someone decides to become a DIY investor, the next decision they need to make is whether they should invest by simply choosing a single asset allocation ETF, or whether they should choose multiple ETFs based on different criteria to further customize their portfolio to their specific preferences. When someone is wrestling with this decision, what should their thought process be and what are the pros and cons of going with a single asset allocation ETF vs buying multiple individual ETFs?
- Let’s start with the simpler scenario, and assume that the investor decided that asset allocation ETFs are the right choice for them. To start, once someone has made the decision to invest by simply selecting a single asset allocation ETF, what is the next thing that they need to do, to ensure that they select the correct one for their particular situation?
- One ETF that I’ve been particularly eager to see, specifically from BMO, is an all-equity, asset allocation ETF. I recently heard that BMO has now created one. For anybody not familiar, can you explain what an “all-equity” asset allocation ETF is, and how is your all equity ETF (ZEQT), different from the other two all equity ETFs from Vanguard and iShares?
- What about investors who really like the benefits of asset allocation ETFs, but want their portfolio to be focused more on socially responsible investing instead of just trying to capture the entire broad market across the entire world and all the companies within?
- There’s been some very interesting research on ESG (socially responsible) investing, particularly from Ben Felix over at PWL Capital, where from his research it appeared that ESG ETFs tend to have a lower expected return compared to an investor who chose to just invest in the total broad market. Based on that research, it appears that the investor has to choose whether they are okay with potentially smaller expected returns in exchange for being socially responsible investors. What are your thoughts on this?
- Do you think there is a middle ground where we can be socially responsible without having to potentially sacrifice some of our expected investment returns? (ex. investing in the total market, but then taking some of those gains and investing them directly into charities that we want to support? Doing some sort of hybrid?).
- I noticed that you and the team at BMO produce a lot of free education and research for DIY ETF investors like myself and many of the listeners of the show. For somebody that wants to learn more about what we discussed today and other DIY investor ETF topics, what’s the best place for them to go?
Leave A Response