In this article, I’ve covered the 7 best Canadian ETFs to own in 2019. Before we get to the actual list, let’s first look at the ETF scenario in Canada.
According to a recent report from the Bank of Montreal, the sales in the exchange-traded assets are set to double this year. The report also predicts further growth in sales, and it is clear that investors have their eyes set on ETFs in the year.
Canadian ETFs – Quick Overview
Investors have better opportunities this year with the extended rise of ETFs in Canada.
With that said, by using newer technologies and themes, the efficiency of ETFs have become a reliable source of consistent revenue for Canadians. Thanks to the new technologies, the investment options have accommodated the latest digital enhancements for efficient platforms.
The level of innovation has risen considerably with the integration of the new technologies too. This means enabling exchange-traded funds (ETFs) to take on new forms and achieve better opportunities to the fingertips of enthusiasts.
ETF Sectors to Watch For in 2019
According to the expert economists responsible for the ETFs reports, there are specific bets to watch for in 2019.
For example, one positive area to pay attention to is fixed income sectors.
If you are thinking about carving a significantly fixed income universe by credit quality, by curves, or long, you stand a great chance to build your portfolio.
The benefits extend beyond normal ROIs to equity markets, diversification, and low costs; meaning the ease of trading is achievable. Taking these benefits to a fixed income yields some major trades over-the-counter.
It is amplified more and set to provide the best results. ETF solution makes sense in this way, as you get consistent amplification.
Experts predict a considerable amount of attention from Canadian investors this year, which will set it off and exceed the local marketplace.
As the investors seek to reposition their fixed income, they potentially seek shorter-term bonds, as they seek credit trade on and off depending on their view of the marketplace. The ETFs help them achieve this easily, and this is such an efficient way to trade especially on the exchange like a stock.
This is a proven method, which is efficient enough to trade on the exchange like a stock, instead of trying to source individual bonds. Investors can effectively deal with concerns you might have on an OTC marketplace.
Why You Should Consider Investing In Canadian ETFs
Making choices on the sectors completely relies on individual investors. For example, if you are more defensive and believe the cycle will not maintain its continuity but is reaching its end, you are likely to become a defensive investor.
Based on your view on equity exposure will not have the same risk levels, you will focus on things such as consumer staples, and utilities. Such issues do not put the same amount of money at risk, as some of the higher-volatile sectors in the economy.
According to the bank’s report on the ETFs, they are traditionally segmented exposures but bring a more balanced product. With the Canadian equities, fixed income, and sector ETFs, they can achieve a true balance. This is related to the success in the mutual fund space, which has not really translated yet to the ETF world.
This year brings the change everyone has been longing for. The segmented approach remains the area of focus as more attention is centred too. Investors can build the portfolio just as they want to view it whether in sectors, pieces of the fixed income universe, or curve
Top 7 Canadian ETFs to Own in 2019
Alright then, here’s the list of top 7 best Canadian ETF’s to own in 2019:
1. Vanguard S&P 500 ETF
This is the best overall ETF and the first in the list.
It comes from the largest mutual fund company which is Vanguard. It charges an expense ratio of only 0.04% and has received a recommendation from Warren Buffet. Buying into the fund will give you exposure to 500 of the biggest public companies in America too, as an added advantage. This means exposure to lots of diversity.
The best part is that the option is safe and has reliable stability. For a long time in history, the S&P 500, has been a proxy for the overall US economy with retunes as high as 10% yearly. Although past performance may not indicate the real future, it gives confidence to investors, especially with long-term ambitions.
2. SPDF S&P 500 ETF
This is another S&P 500 with immense influence on investors. It is best suited for active traders. It is at times called the spy and is one of the most heavily traded on the market. The ETF has real-time, active investors using the fund to transact in the US stock market without any limitations. It launched in 1993, as the first exchange-traded fund.
Most investors prefer this option because it has extremely high liquidity with only 0.0945% expense ratio. This ration is higher than many competing ETFs but still retains its popularity and trade frequency seen by the increased investors cashing in.
3. Fidelity Zero Total Market Index Fund
Although there is no long history to rely on here, the large-blend fund has no fees and no minimum charges. This means that if you want to invest in an ETF for free, this would be your best chance this year. This is an attractive option for most individual investors.
With no minimum to worry about, all ETFs make an enticing option for both retirement accounts and brand new investors. This enticing option has the index focusing on the total return of the United States stocks market, which makes it even more diverse.
The best proxy for comparison based on their past performance is Fidelity Total Market Fund, which offers similar performance to the Dow Jones US Total Stock Market index.
iShares Russel tracks 2,000 small-cap stocks, as it is made up of the smallest measured by market capitalization. The index is another efficient way to track the US stock market, as a whole.
It still focuses on smaller companies. IWM charges 0.19% expense ratio, which is much lower than many mutual funds. Compared to other S&P 500 options, it has four times as many stocks to buy and sell keeping up the index fund in-line with the index.
Most of the investors maintain that smaller stocks allow more room for growth compared to bigger stocks. Contrarians, on the other hand, hold that the small stocks are risky and more volatile. The individual investor is left to make a choice into buying into the US companies with a click and IWM remains a great option.
5. Vanguard FTSE Developed Markets
If you are seeking to add international exposure to your portfolio, the large companies especially in developed countries suffer the best balance of risk and return. For this reason, the developing market funds are tempting but beware that they are riskier than investments in developed markets.
It follows that FSE developed all cap ex-US index and companies regardless of their sizes can participate. Many medium-level American companies are solid in the FTSE VEA. It puts stocks in Europe, and the developed Pacific nations outside of Canada and the U.S.A. The funds’ charges are averagely 0.07% making them one of the lowest available for trading.
Many new entrants in the investment of ETFs find it an attractive option not only because of the low charges but exposure to the international markets
The QQQ is best suited for NASDAQ large-cap stocks, as it tracks the 100 index. It is made up of the 100 largest stocks in the NASDAQ stock exchange, which is traditionally the home to many technology companies.
This means the investor has a chance to invest in companies with long-term companies. The index is limited to the NASDAQ companies, so you have a chance to be in the technology sector. It charges 0.20% expense ratio.
7. Schwab US Dividend Equity ETF
Charles Schwab offers another significant lower cost ETF for family investment. This is among the best American dividend to explore. If you are keen on turning your portfolio into cash flow, the fund on large companies brings a stable dividend. The retirees seek to earn income from a portfolio without selling often use dividend stock as the main issue.
This means the ETF is passively managed to track the Dow Jones U.S dividend 100 index. It charges a very competitive 0.07% expense ratio.
Canadian investors now stand better chances with the latest opportunities this year regarding the extended rise of ETFs in Canada.
With the use of new technologies and themes, the efficiency of ETFs has become a reliable source of consistent revenue for local investors. Since the introduction of new technologies, the investment options have accommodated the latest digital enhancements for efficient platforms.
We have experienced higher levels of innovation has risen considerably with the integration of the new technologies too. This translates into enabling exchange-traded funds to take on new forms and achieve better opportunities to the fingertips of enthusiasts.
Considering statistics from a recent report from the Bank of Montreal, the sales in the exchange-traded assets are set to double in the year.
The report predicts extensive growth in sales, and it is clear that investors have their eye set on ETFs in the year. According to the expert ETF reporters, 2019 is going to be an exceptional year for the industry. With many new players joining the market, there are a lot of new products introduced. This means immense growth in the industry and a focus on the new items in the market place.
Please let me know your thoughts and comments below.
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Hey, I’m Sagar Sridhar from Toronto, Canada.
I am a self-taught, motivated Canadian Personal Finance Blogger and love writing articles about Savings, Investments, Stocks & ETF reviews, Side Hustles, Frugal Living, Credit Cards and Retirement Planning. Husband. Tech Savvy. Father. Software Developer. Web Designer. Hiking Enthusiast.