John De Goey's Top Picks
John De Goey, portfolio manager at Industrial Alliance Securities
Focus: Personal finance and ETFs
I have no forecast regarding what the market might do in the future. Owing to my belief in market equilibrium, I continue to hold that no one can reliably “outperform” by picking stocks, forecasting market moves or timing changes in market sentiment. People who purport to be able to do so reliably are severely overstating their abilities. Instead, I believe that prices are more or less fair at all times — and are just as likely to be too high as too low. People should focus on setting an asset allocation that is suitable for them and re-balance their mixes as circumstances warrant. They should do so using products that are cost-effective, tax-effective and broadly diversified.
VANGUARD GLOBAL VALUE FACTOR ETF (VVL.TO)
As a long-time proponent of factor-based investing, I was delighted when Vanguard released a new product that offers global exposure to value stocks. This offers instant diversification and strong exposure to something almost everyone agrees is an important determinant of strong long-term performance.
VANGUARD GLOBAL MOMENTUM FACTOR ETF (VMO.TO)
Much like VVL, this new product offers a way for investors to get exposure to the momentum premium. It is also priced at a reasonable 35 bps (0.35 per cent) and is a good tactical diversifier for those who might otherwise use more traditional strategies in seeking foreign market exposure.
SPHERE FTSE EMERGING SUSTAINABLE YIELD ETF (SHZ.TO)
This product was released only about a month ago and I started using it extensively as soon as it came out. The methodology ensures that investors will be getting a value tilt on a chronically under-owned asset class with a screen for quality. As a bonus, all emerging markets products are “on sale” these days due to the recent Trump-related drawdown. As with all Sphere ETFs, the price is 54 bps (0.54 per cent).
PAST PICKS: DECEMBER 21 2015
SPDR S&P 500 FOSSIL FUEL RESERVES FREE ETF (SPYX.US)
- Then: $48.74
- Now: $53.00
- Return: +8.75%
- TR: +10.32%
ISHARES FACTORSELECT MSCI USA INDEX ETF (CAD-HEDGED) (XFA.TO)
- Then: $20.76
- Now: $22.73
- Return: +9.48%
- TR: +11.27%
ISHARES FACTORSELECT MSCI EAFE INDEX ETF (XFI.TO)
- Then: $21.97
- Now: $20.27
- Return: -7.73%
- TR: -5.80%
TOTAL RETURN AVERAGE: +5.26%