Exchange Traded Funds

The past year and a half has been times of upheavals, not seen for generations. Industry shifts, pattern changes, COVID restrictions etc, has caused many to rethink their investment concerns.

That’s why we at IWC (Integrated Wealth Council) has also been looking at new strategies to stabilise and boost your portfolio performances. One of them are ETFs (Exchange Traded Funds) integrated portfolio strategizing.

What is an ETF?

An exchange traded fund (ETF) is a type of security that tracks an index, sector, commodity, or other asset, but which can be purchased or sold on a stock exchange the same way a regular stock can.

An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies. Some examples are:

o SPDR S&P 500 ETF :Tracks the performance of 500 companies in the S&P index.

o Invesco Solar ETF :Tracks the performance of MAC Global Solar Energy Index

o First Trust NASDAQ Cybersecurity ETF: Tracks the NASDAQ CTA Cyber Security Index

Advantages having ETFs over Stocks

- ETFs diversify your investments more cost effectively, rather than buying a basket of industry stocks separately which can be expensive.

- Able to invest in hard to access markets like buy-write ETFs which involves earning an income from writing options.

So how do you start?

Investment Strategy

- Select a portfolio of ETFs from a pool of 7000+ ETFs that are sizeable enough to represent sectors such as renewable energy, airlines, medical science, home builders and electric vehicles etc.

- After selecting the suitable ETFs to form the portfolio, the best counters from the ETFs will then be chosen to be added to the portfolio to boost the performance.

Of course IWC already does most of the legwork for you, in advising or managing your portfolio

The portfolio might include ETFs such as Invesco Solar ETF but we will also analyse, rank and select the companies (if applicable) within the ETF holdings that we think should have a higher exposure and purchase it to add to the portfolio.

The ETFs and stocks will be reviewed and adjusted periodically based on the market conditions and economy developments.

Typical Number of holdings in a portfolio

- 16 to 20 ETFs and stocks

Investment timeframe

- Medium to long term (3 years to more than 5 years)

Given the long term stability and performance of ETFs, we have included these in our portfolio considerations to ensure you get better returns.

Material in this document is for education purposes only. It is distributed with the understanding that neither the authors nor the publisher are rendering legal, accounting, tax, investment, or other professional services by publishing this document. This document is not a substitute for the advice of your financial advisor, or any of your other advisors, personal or professional.