Invesco Canada blog

Insights, commentary and investing expertise

Outlook 2017: Factor investing in the coming year

Although it may sound like a well-worn cliché, we are at a critical juncture as 2017 approaches. Two important tests of voter sentiment – the U.S. general elections and the U.K.’s referendum (Brexit) to leave the European Union (EU) – have occurred in less than six months’ time, and the ramifications could prove profound. Although the U.S. is now in the seventh year of an economic expansion, the current recovery is among the slowest on record and has been subject to bouts of market volatility that have buffeted the financial markets and tested investors’ resolve.

Continued

Leave a comment

Q&A: How are Canadian advisors using low volatility in portfolios?


October 12, 2016
Subject | ETFs | Institutional | Smart beta

We hosted two experts from S&P Dow Jones Indices for an in-depth conversation about low-volatility as an investment factor. In this final installment of the interview, we discuss different advisor views on low volatility, how it pairs with other factors and how it can be used in portfolios.

Continued

Leave a comment

How has the low-volatility factor performed in recent markets – and why?


September 28, 2016
Subject | ETFs | Smart beta

Late summer has not been fruitful for the low-volatility factor. From July 6 to September 9, the S&P 500 Low Volatility Index has fallen by 4.67%, while the S&P 500 Index gained 1.70%.1 This is in sharp contrast to the second quarter, when the low-volatility index returned 6.75%, and the broad-market index returned 2.46%.1 Naturally, some investors are wondering what’s behind the shift.

Continued

Leave a comment

Q&A: Are all low-volatility strategies the same?


August 31, 2016
Subject | ETFs | Smart beta

As market volatility continues unabated, investors across the globe are seeking out tools, strategies and solutions to reduce their overall risk while still reaping the rewards that equity investing can provide. Low-volatility strategies have become valuable tools for many investors and advisors, but are all low-volatility strategies created equal?

Continued

Leave a comment

Sell in May and go away? Maybe not


June 3, 2016
Subject | ETFs | Institutional | Smart beta

“Sell in May and go away” is a well-known market adage that warns investors to sell their equity holdings in May to avoid the typically volatile May-to-October period. Historically, stocks have underperformed in this six-month (“unfavourable”) period, compared to the six-month (“favourable”) period from November through April.

Continued

Leave a comment

Potential for a smoother ride in all markets


March 16, 2016
Subject | ETFs | Smart beta

The trade-off between risk and return is central to modern portfolio theory. Finance textbooks teach that the more risk an investor assumes, the greater the expected return. This is not only academic, but intuitive to most people. Following this logic, one would expect lower volatility securities to generate lower returns over time, and higher volatility securities to deliver higher returns in exchange for added risk. But this may not necessarily be the case – at least within a given asset class.

Continued

Leave a comment

ETF trading: A guide to best practices


January 16, 2016
Subject | ETFs | Smart beta

1. Use limit orders

Limit orders offer advantages over market orders because they provide certainty on the trade price and act as a guard against overpaying. A market order may be effective when placing small trades in highly liquid ETFs, but there is a risk that it could sweep indiscriminately through the order book, leading to an undesirable price. A limit order, however, sets the price at which you are willing to transact. The closer your price is to the bid or ask, the greater the probability that your sell or buy will be executed. The use of a limit order is not without risk, as your trade may not be executable at the specified price.

Continued

Leave a comment