section header ETF fundamentals
subsection header Strategies
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ETF strategies overview
ETFs are cost-effective tools that can help you diversify a portfolio and execute a range of strategic and tactical options.
Every ETF strategy comes with its own purpose and risk profile. When considering different strategies, investors should be realistic about their own temperament and tolerance for risk. Some of the ETF strategies described here entail taking concentrated investment positions, so it's important to weigh the extra risks involved against the potential rewards.
Here is an overview of the different ways investors can use ETFs:
Core allocation |
Gain fast, precise and cost-effective access to a broad variety of asset and sub-asset classes to build a strategic core portfolio.
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Portfolio completion |
Fill gaps in a portfolio to broaden diversification, minimize benchmark risk or add exposure to specific market segments or factors. |
Active-passive combinations |
Combine index ETFs and low-cost actively managed funds for diversification and the opportunity for outperformance. |
Liquidity management |
Invest short term in the market with ETFs while refining a longer-term investment view. |
Asset allocation |
Allocate assets among taxable and tax-advantaged accounts to help maximize after-tax returns. |
Tax optimization |
Harvest losses to potentially improve tax efficiency, while maintaining exposure to a given market. |
Rebalancing |
Manage portfolio risk by rebalancing back to a target strategic asset allocation. |
Tactical adjustments |
Overweight or underweight certain asset classes, regions or countries. |
Basics
Learn the basics of ETFs, including their history, how they compare to mutual funds, what types are available and more.
Management
Learn about the different types of exchange-traded products, how index and active ETFs are managed and more.
Trading
Learn about ETF trading, common order types, premiums and discounts, liquidity considerations and more.
Commissions, management fees, and expenses all may be associated with investment funds. Investment objectives, risks, fees, expenses, and other important information are contained in the prospectus; please read it before investing. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated. Vanguard funds are managed by Vanguard Investments Canada Inc. and are available across Canada through registered dealers.
This material is for informational purposes only. This material is not intended to be relied upon as research, investment, or tax advice and is not an implied or express recommendation, offer or solicitation to buy or sell any security or to adopt any particular investment or portfolio strategy. Any views and opinions expressed do not take into account the particular investment objectives, needs, restrictions and circumstances of a specific investor and, thus, should not be used as the basis of any specific investment recommendation. Investors should consult a financial and/or tax advisor for financial and/or tax information applicable to their specific situation.
All investment funds, including those that seek to track an index are subject to risk, including the possible loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market. While the Vanguard ETFs are designed to be as diversified as the original indices they seek to track and can provide greater diversification than an individual investor may achieve independently, any given ETF may not be a diversified investment.
All monetary figures are expressed in Canadian dollars unless otherwise noted.