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Ask Bender: Why do you overweight Canadian stocks in your model ETF portfolios? (Part II)

By Justin Bender · September 13, 2016 - 0 comments

In my last blog post, we found that overweighting Canadian stocks by about 30% (relative to a global market capitalization equity weight of about 3%) had historically resulted in a less risky portfolio. Obviously, this analysis gave no guarantee of the minimum risk portfolio going forward, but it did provide a useful starting point for discussion.

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Ask Bender: Why do you overweight Canadian stocks in your model ETF portfolios?

By Justin Bender · September 7, 2016 - 0 comments

During periods when global stocks have been outperforming Canadian stocks, I receive a growing number of questions asking why my model ETF portfolios are skewed so heavily towards Canadian stocks (as one might imagine, I receive the opposite feedback when Canadian stocks are outperforming global stocks). The argument usually goes something like this: Canadian stocks make up just over 3% of the global equity markets – shouldn’t Canadian investors simply hold a 3% equity allocation to Canadian stocks?

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New Multifactor ETFs from iShares (Part II)

By Justin Bender · August 22, 2016 - 0 comments

Last week we looked at the iShares Edge MSCI Multifactor Canada Index ETF (XFC), one of a trio of new ETFs based on multifactor indexes from MSCI. Recall that we found a few surprises in our analysis: a large part of the index’s performance could not be explained by the size, value, momentum and quality factors. Now let’s see how the US and international multifactor indexes hold up to the same analysis.

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New Multifactor ETFs from iShares

By Justin Bender · August 18, 2016 - 0 comments

So you’ve read all about the benefits of index investing. Your portfolio is dirt cheap and broadly diversified. Heck, you’ve even stopped checking your portfolio value on a daily basis. Just when you thought you had it all figured out, ETF providers drop a bombshell by claiming there may be a smarter way to invest.

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The Ultimate Buy-and-Hold Portfolio

By Justin Bender · August 9, 2016 - 1 comment

A number of readers have asked me what I think about Paul Merriman’s Ultimate Buy-and-Hold Portfolio. It sure does have a nice ring to it (placing the word “ultimate” before anything tends to have that effect). Merriman believes that you can increase the expected return of a simple Couch Potato portfolio by adding more small-cap and value companies to the mix. This is not a new idea – for decades now, academics have known about the historical small-cap and value premiums. Notable fund companies, like Dimensional Fund Advisors (DFA), have even created products based on their research.

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