The latest report on where exchange-traded fund investors are putting their money shows a marked preference for U.S. and international markets over Canada.
Equity funds took in $2.6-billion in May, with $1.1-billion going to the U.S. market and $1.3-billion flowing into international markets, which means stock markets outside North America. ETFs tracking the Canadian market took in just $206-million, a sign of investor disenchantment with the economic performance of this country.
Two particularly popular ETFs last month suggest an ideal compromise for investors who want to emphasize markets outside Canada while recognizing that some Canadian content still makes sense. When you invest in Canada, you avoid currency fluctuations and the potential for foreign withholding taxes on dividends, both of which can undermine returns. If you live and plan to retire in a Canadian-dollar world, it makes sense to have much of your portfolio in the…
