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Diversify Your Portfolio With This ETF

Baystreet.ca
·2 mins read

The entire real estate sector has been absolutely massacred in recent weeks, for an understandable reason. The longer the impacts of the economic shutdown related to the COVID-19 outbreak are, the higher the likelihood of nonpayment of rent/leases seeps into Real Estate Investment Trusts (REITs) and Exchange Traded Funds (ETFs) with a real estate focus or real property holdings/exposure.

With that being said, for those enterprising investors who believe that an orchestrated move by global central banks to continue to pump liquidity into sectors of the economy like real estate will continue, then now may be the time to start getting interested in ETFs like the SPDR International Real Estate ETF (NASDAQ:RWX).

This ETF is designed for investors looking for non-U.S. exposure, which fits the diversification bill for many Canadian investors who tend to have a home bias, or those who only own Canadian or U.S. exposure in their portfolios.

I’m a big believer in geographical diversification for a number of reasons. Most of these reasons are unrelated to the purely academic benefit one receives from lowering one’s portfolio correlation, thereby increasing one’s risk-weighted expected return.

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From a growth perspective, my belief is that North America and Europe are generally poised to lag the emerging economies of Asia and Central/South America for the next 50 years, as globalization will allow for further integration of supply chains and increased demand from these regions of the world which are less indebted than most large, industrialized nations.

Invest wisely, my friends.