Articles

Growth Exchange-Traded Funds (ETFs) can be a popular choice for investors seeking long-term capital appreciation through a diversified portfolio of stocks and bonds. These ETFs provide an 80% allocation to a diversified set of equities (including geographic, sector, and industry diversification) and a 20% allocation to a diversified set of bonds (diversification is across both geography and length of the bonds).

The investment community tends to evaluate a company’s quarterly earnings based on the Earnings per Share (EPS) metrics. Companies that miss earnings expectations are usually punished hard, as investors tend to sell off the company’s share price materially.

Over the past few years, there have been challenging macro issues on many different fronts, from the black swan events of the pandemic to high inflation and large financial market drawdowns that result from rapidly rising interest rates. Canada’s Consumer Price Index (CPI), the key indicator of inflation, showed a meaningful slowdown in recent months in the wake of inflationary pressure. To prevent the risk of over-correcting the economy to moderate inflation, the Bank of Canada has recently begun cutting its key policy rate, and this move will potentially have a positive impact on risky assets.