BMO InvestorLine, a Canadian online broker, has encouraged investors to consider including exchange-traded funds (ETFs) in their portfolios as part of a well-balanced investing strategy.
“Investors looking for investment options that offer diversification and broad exposure to a variety of markets – at a low cost – should consider incorporating ETFs into their portfolio,” said Cesar Rainusso, Vice President, BMO InvestorLine.
Mr Rainusso added: “While ETFs open doors to a variety of markets and can help investors hedge against risk, it’s important to evaluate the areas where you are currently invested in order to avoid over-diversification.”
While ETFs are relatively new to the Canadian market compared to more traditional investments such as bonds and mutual funds, ETFs in Canada have grown substantially since being introduced, according to a recent report by BMO Global Asset Management.
The report noted that the industry currently stands at C$50 billion in assets under management, with the industry as a whole experiencing double digit growth (15.9%) so far this year.
Mr Rainusso noted that while the industry has made significant gains in Canada, many investors remain unfamiliar with how ETFs work.