After the rough ride the markets have given your clients, they are little comforted by the sit tight approach. Many clients want a proactive investment approach that can become defensive or opportunistic depending on circumstances. Let’s face it, mutual funds are not well suited for tactical asset allocation.

ETFs, on the other hand, let you dart between asset classes and industry sectors swiftly and inexpensively to pinpoint potential growth hot spots or to strike a more defensive pose.

There are 122 ETFs available in North America and they cover a huge investment universe but are delivered in very useful segments. Many ETFs are based on broad stock indices in the U.S., Canada and internationally. Since some of these indices are based on growth or value styles, similar style ETFs are also available. Want to zero in on the U.S. healthcare sector? Numerous industry sector ETFs exist as well as a small but growing number of global sectors funds. Tangible assets such as gold and real estate investment trusts have sprung up in ETFs, and even fixed income ETFs are available. Just about any asset class you can name is now represented by at least one ETF.

For advisors wanting to implement some technical strategies, ETFs are ideal. You can buy a fully diversified portfolio in exactly the market, style or sector of choice for the cost of a simple stock trade. Sector rotation has never been so easy; seasonal selling and buying is just as easy. Because ETFs trade just like a stock, you can use limit and stop loss orders as well as some option strategies. You can even short sell them.

With ETFs, you can help your clients do more than hold on for dear life in rough markets.

Sponsored by Barclays Global Investors Canada Limited
Contact Howard Atkinson at howard.atkinson@barclaysglobal.com

Commissions, management fees and expenses all may be associated with Exchange Traded Funds. Please read the relevant prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. BGI’s ETFs, other than iUnits, are not qualified for distribution to the public in Canada as no prospectus has been filed for such funds with Canadian securities regulators.