John DeGoey is vice-president and associate portfolio manager at BBSL. His focus is on personal finance and ETFs.
Vanguard FTSE Canada All Cap Index ETF (VCN-TSX)
This tracks the FTSE Canadian All Cap index for 12 bps. It is important to get mid caps and small caps into a portfolio for the good risk/ return attributes.
Vanguard US Total Market Index ETF (VUN-TSX)
This is a total market (multiple market capitalization) product that costs only 15 bps. It is unhedged and many people feel the Canadian dollar will continue to drop.
Vanguard FTSE Developed ex North America Index ETF (VDU-TSX)
This tracks developed markets outside of North America. VDU is doing well these days and under-owned by most investors. Cost is 28bps. No currency hedge.
Past Picks: Feb. 14, 2013
iShares Global Infrastructure Index Fund (CIF-TSX)
Then: $19.66; Now: $23.16; Total return: +20.08%
iShares Broad Commodity Index Fund (CAD-Hedged) (CBR-TSX)
Then: $22.87; Now: $21.23; Total return: -7.17%
iShares Global Agriculture Index Fund (COW-TSX)
Then: $24.52; Now: $27.15; Total return: +12.49%
Total return average: +8.47%
Prices are reasonably fair for all securities at all times, so don't spend time or money trying to outperform using forecasting or market timing. Instead, set a reasonable and suitable asset mix and stick to it. For most people, given strong equity market performances in 2013, that means taking profits on U.S. equities and using the money to buy income and, if appropriate, emerging markets stocks and/ or tangible stocks. Alternatively, small investors can simply buy those latter two asset classes with money added to their RRSPs this month.