An investment product aimed at those who are skeptical of bonds. In addition, the markets are entering the “second phase of interest mourning”


You want bonds, but maybe not a full serving. Would a portfolio weighing 75 percent stocks and 25 percent bonds be of interest?

You can find this aggressive portfolio mix in the Tangerine Balanced Growth ETF Portfolio, an investment fund product from the online bank Tangerine, which offers a high degree of simplicity as well as some potentially damaging disadvantages.

Tangerine has three ETF portfolio funds that bundle low-cost, index-tracking exchange-traded funds into one mutual fund that can be bought and sold free of charge. The management expense ratio for all three is 0.77 percent, which is significantly more expensive than buying the individual ETFs individually. It’s also much cheaper to use asset allocation ETFs, which mimic what Tangerine’s ETF portfolios do in ETF form. Buy an Asset Allocation ETF through any broker or stock trading app and you will get an instantly diversified portfolio with different mixes of stocks and bonds.

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However, the mix of 75-25 is unusual. Most balanced ETF portfolios have a 60-40 mix, which until recently was the simple standard mix for mid-range portfolios. One exception is the Horizons Balanced TRI ETF Portfolio (HBAL-T) at 70-30, but it’s a total return product that doesn’t pay dividends or bond interest. Instead, the share price reflects a mixed return from changes in the share price and income.

There are also 80-20 asset allocation ETFs that target growth investors, but they can overpower the aggressiveness for some investors. Going with a 75-25 mix seems a little less edgy.

Aside from fees, the other potentially groundbreaking aspect of the Tangerine Balanced Growth ETF portfolio is the surprisingly low weighting of Canadian stocks. As of August 31, the fund had a 45 percent weight in US equities, a 19 percent weight in developed international markets, a 9 percent weight in emerging market equities, and a 2 percent weight. Cent weighting on Canadian large cap stocks. The rest is in bonds or cash.

Two final points about this Tangerine product that may explain why it attracted a fortune of $ 340 million: There are no fees of any kind beyond the high MER except a fee of $ 125 for the Transfer a registered account to another financial company and the minimum investment is only $ 25. Small investors are welcome.

– Rob Carrick, personal finance columnist

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Stocks to think about

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Enbridge Inc. (ENB-T) The pipeline operator appealed to green investors this week when it hosted a forum to showcase its commitment to environmental, social and governance principles – underscoring the importance of ESG for companies to look for long-term investors will. However, Enbridge also stands by its traditional pipeline infrastructure, arguing that conventional energy is essential to meet growing demand while greener energy expands, making its pipelines something of a bridge to the future. Will Enbridge succeed in attracting long-term ESG investors? David Berman shares his thoughts.

Corby Spirit and Wine Ltd. (CSW-AT) Who is not looking for stability these days? Inflation is hot, the stock market is nervous about a potential default by real estate giant China Evergrande Group, and COVID is dragging on, one wave following another. According to Philip MacKellar of The Contra Guys, stability is what this stock has to offer. The balance sheet is consistently clean with high levels of liquidity, no debt and ample working capital. Shares outstanding have stood at a stable 28 million over the past decade, meaning the owners have avoided any dilution. The company’s turnover has remained constant over the past 10 years. And the dividend currently brings an attractive 4.7 percent with a fixed distribution policy.

The rundown

The markets flash yellow when they enter the “second phase of interest rate mourning”

Rising bond yields aren’t always bad news for stocks and other “riskier” assets, but the current surge is legitimate cause for concern as the fourth quarter begins. The rise in yields is against the backdrop of exaggerated valuations on Wall Street, slowing economic growth and falling consumer sentiment. The volatility, which is still largely comatose across a number of asset classes, has also shown signs of coming back to life. The S&P 500 was just having its worst month since March last year. The trigger and context for this is the Fed, which indicates that it will raise interest rates earlier and more aggressively than previously assumed in order to contain inflation. You may have heard this story before. But as Reuters’ Jamie McGeever reports, there are signs that the Fed, as it prepares to pull the trigger, may be different this time around.

See also:

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“Of course” that global bond yields would rise from here, say strategists

Investors can still find value in China, but be selective, says financial expert

China has it all these days – at least in terms of disturbing news. From the escalating debt problems of giant real estate developer China Evergrande Group and Beijing’s brutal crackdown on domestic tech companies to power outages and the abrupt eradication of the private education sector, the country has shocked investors with one shock after another in recent months. So has China become “uninvestable” for foreigners? No, but outsiders have to be picky, says Matthew Strauss, senior vice president at CI Global Asset Management. Born in Namibia and trained in South Africa, the strategist has helped drive the CI Emerging Markets Fund to outperform the past decade and insists there are still tempting opportunities in China. Ian McGugan found out more.

“Perfect storm” lifts US dollars over troubled markets

A sharp rally in the dollar is picking up steam fueled by restrictive Federal Reserve stance, rising government bond yields and concerns over the possibility of a protracted battle to raise the US debt ceiling. Will the rally in the greenback last? Gertrude Chavez-Dreyfuss and Saqib Ahmed from Reuters report.

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Investors see Japan’s new market leader as market-friendly, but reforms are in question

Investors see Japan’s new leader Fumio Kishida as a constant consensus-builder who can lead the ruling Liberal Democratic Party and its coalition partner to victory in November’s parliamentary elections. But while Japanese stocks should benefit from Mr Kishida’s market-friendly image, less political uncertainty, and an improving economy, investors are unsure whether he can press ahead with tough measures to improve economic health.

Other (for subscribers)

The highest-yielding stocks on the TSX plus risk data

Analyst Upgrades and Downgrades Friday

Analyst upgrades and downgrades Thursday

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Friday insider report: Billionaire businessman Eric Sprott is adding to his position in this declining stock

Thursday Insider Report: CEO Raises Nearly $ 1M in Selling These Bank Stocks

Numbers cracker: These five pet food stocks offer dividend seekers something to chew on

Number servant: Oil stain strategy selection for stocks that offer both security and value

What’s going on in the next few days

How Concerned Should Investors Be About Inflation? Our Ian McGugan will share his perspective this weekend.

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US jobs, an OPEC oil rally, and other world market topics for the week ahead

Click here to view Globe Investor’s earnings and business news calendar.

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Compiled by Globe Investor Staff


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