When mutual funds make more sense than ETFs GlobeInvestor
How advisors approach mutual funds versus ETFs depends, in part, on whether they’re stock-pickers or prefer to rely on portfolio managers to identify market opportunities.in 2018 for the first time since the global financial crisis, driven by their lower fees and the growing number of products for financial advisors and investors to choose from. Still, Canada’s ETF industry, with about $170-billion in assets under management , is just a fraction of the $1.
“In later-stage markets, a good actively managed mutual fund can maximize returns and limit volatility more than an ETF can and alleviate the emotional ride for investors on the downside,” says Mr. Tanner. The choice of whether to use mutual funds or ETFs in a client’s portfolio usually depends on the client’s financial goals and tolerance for volatility.
David Boyd, vice-president and portfolio manager with the Boyd Wealth Management Group at BMO Nesbitt Burns Inc. in Windsor, Ont., says mutual funds are often well-suited to newer investors seeking “instant diversification, without having to do a bunch of heavier asset-allocation lifting.” “Everything is out there,” says Mr. Boyd. “It comes down to being aware of clients’ risk tolerance and the product risk. You also need to be able to explain it clearly to clients so they know exactly where their money is going.”
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