Investors tracking market-cap-weighted indices may be exposed to several flaws inherent to that approach. A rules-based Fundamental Index® approach focuses on the strength of the underlying business by looking at sales, cash flow, dividends and book value.
Scott Boniferro, Vice President, Global Investment Strategist, Invesco Canada, joined Larry Berman on BNN’s Berman’s Call to discuss the benefits of a Fundamental Index® strategy and the differences between this rules-based approach and a traditional market-cap-weighted ETF.
|Name||1-yr||3-yr||5-yr||10-yr||Since inception||Inception date|
|PowerShares FTSE RAFI Canadian Fundamental Index ETF||17.13||5.81||7.45||1/10/2012|
|iShares Core S&P/TSX Capped Composite Index ETF||12.65||6.49||6.85||4.63||6.28||2/16/2001|
|PowerShares Fundamental High Yield Corporate Bond (CAD Hedged) Index ETF||7.26||3.93||5.39||5.10||6/21/2011|
|iShares U.S. High Yield Bond Index ETF (CAD-Hedged)||7.08||3.13||5.65||6.40||1/21/2010|
|PowerShares 1-5 Year Laddered Investment Grade Corporate Bond Index ETF||3.19||2.96||3.02||3.18||6/15/2011|
|BMO Short Corporate Bond Index ETF||3.06||2.84||2.93||3.29||10/20/2009|
|RBC 1-5 Year Laddered Corporate Bond ETF||3.04||2.83||1/9/2014|