Tue, 21 June 2022
When learning how to invest, we are consistently told to conduct our “due diligence” on the investments that we’re considering buying. Yet, almost all of us haven’t actually been trained on how to analyze the investments that we’re considering, so that we choose the ones that are right for our particular situation. To help remedy this, I thought it would be good to give listeners a bit of a training on how to actually interpret the figures and terminology that we see used here in Canada, when we’re considering purchasing an investment. Now this is obviously a very large topic as there are many types of investments, so I thought we could start with learning how to understand bonds (especially bond ETFs). We’ve definitely seen some drops in the market recently and I suspect many investors are wondering about holding bonds, if they are holding the right types of bonds, and how to actually interpret the data that you see when you’re looking up information about a bond ETF. Guest Bio:To help me with this, I have Danielle Neziol back on the show. Danielle and her team actually created and continue to manage the largest bond ETF in Canada (and in case you’re curious, that ETF is ZAG from BMO ETFs which now has over $5.8 billion in net assets). Danielle is the Vice President over at BMO ETFs, and I thought it would be great for us to actually get some training from her on how to interpret the facts sheets that we all see when we look up any type of bond ETF, no matter who the provider is. My goal is that this interview gives you the knowledge to be more confident in your investing, and hopefully helps relieve any anxiety that you may feel when it comes to choosing your own investments, or helping ensure that you are in the types of investments that are the best fit for you. Resources Mentioned:Danielle and her team host free weekly webinars where you can learn more about ETFs, as well as ask them your ETF questions. I've been a guest there several times and it really is a great resource for Canadian DIY investors. You can view past replays and sign up to attend the upcoming webinars for free here: etfmarketinsights.com Also, be sure to subscribe to the ETF Market Insights YouTube Channel where you can also see past recordings. Questions Covered:
7. ETF fact sheets typically have an annualized performance section where they show how the ETF performed relative to its index. For ETFs that are looking to match the index, what would be considered a reasonable spread between the two vs a concerning number? 8. One page that seems especially critical to evaluate, whether evaluating a bond ETF or an equity ETF, is the “Holdings” page where we see all the investments that the ETF contains. Let’s pretend that you just pulled up a core bond ETF like ZAG and went to its holdings page. What would you look for and how would you analyze and interpret the data that you see there? (for anybody that wants to follow along, you can go to BuildWealthCanada.ca/zag and that will forward you there) and click on the holdings tab. Areas to cover:
Are there any other areas that you think are critical to look at, and if an investor is feeling overwhelmed by the large amount of bond ETFs out there and is getting into a bit of paralysis analysis, what would you recommend as their next step? 9. Can you speak to the relationship that bonds have with rising interest rates, and at what point do we start to take advantage of those higher interest rates in our bond portfolio to offset the drop in price that occurs when interest rates go up? 10. For anybody looking to learn more, can you tell us more about ETF Market Insights, the YouTube channel, and any other resources listeners may find helpful?
Direct download: Are_You_Holding_the_Right_Bonds_in_Your_Investment_Portfolio.mp3
Category:Investing -- posted at: 2:13pm EST |