The bear necessities: Here’s a look at some ETFs that can help during a downturn

While the performance of ETFs will be negatively affected by the indiscriminate bear, there are also ways they can provide pockets of relative outperformance even in times of distress.

This week, following renewed oil price weakness, markets reached bear market status worldwide, with the MSCI All Country World Index breaching the 20 percent decline threshold from the high set last May.

If you wonder what that means, this is actually the part of the cycle when your adviser hides under their desk, and you, upon reading your bank account statements, assume what’s known in airline lingo as the crash position.

The alternative, of course, which lots of people choose, is to not read statements whatsoever –  it likely isn’t as irresponsible as it seems, given that there is not much that you can do, no matter what you might like to think.

Or is there?

Overall, I believe Canadian investors are facing the mother of perfect storms. On one side, we’ve fees for asset management that are among the highest in the world, which coupled with a sizable closet-indexing fraternity in mutual funds and investors traditionally responsible for a higher “home-bias” (the tendency to take a position one’s portfolio mostly in domestic securities) are detrimental to investment success.


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