A cautious investment style could be your trump card

Risk Disclaimer

The value of investments and any income from them can go down as well as up and investors may not get back the original amount invested. Past performance should not be seen as an indication of future performance.

Opinions expressed by individual authors do not necessarily represent those of BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

Shares purchased on the secondary market cannot usually be sold directly back to the Fund. Secondary market investors must buy and sell ETF Shares with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current Net Asset Value per Share when buying ETF Shares and may receive less than the current Net Asset Value per Share when selling them.

The unpredictable nature of US President Trump’s tweets has created a level of uncertainty in financial markets that hasn’t been seen for quite some time. The inversion of the yield curve in many countries, traditionally regarded as a recessionary indicator, has spooked some market participants. Volatility could well stay elevated for a prolonged period, meaning that investors need to revisit their risk management, including asset allocation, currency hedging and interest rate duration.

Other than the usual safety of cash, US Treasuries and gold, most other asset classes face challenges. In such an environment, dividend-paying stocks become arguably more attractive, particularly focusing on companies characterised by strong fundamentals, which in turn means that payments are more likely to be sustained (and share prices supported) through harsh economic conditions. Combining income-based equity with a quality screen can produce a strategy with a greater chance of filtering out ‘yield traps’.

Risk Disclaimer

The value of investments and any income from them can go down as well as up and investors may not get back the original amount invested. Past performance should not be seen as an indication of future performance.

Opinions expressed by individual authors do not necessarily represent those of BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

Shares purchased on the secondary market cannot usually be sold directly back to the Fund. Secondary market investors must buy and sell ETF Shares with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current Net Asset Value per Share when buying ETF Shares and may receive less than the current Net Asset Value per Share when selling them.

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