Portfolio mixology: How ETF investors are blending stocks and bonds in a tough year

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Talk about asset allocation is everywhere in investing

. What you don’t see much is insight into what investors are actually doing. For some help on that, let’s consider how exchange-traded fund assets have been invested. Here’s a breakdown of ETF assets as of Sept. 30:Multi-asset ETFs tend to skew to stocks, which suggests that the 5 per cent in these products can be broken down in a way that gives us an overall weighting of 65-per-cent stocks, 32-per-cent bonds and 3 per cent for other assets.

In the equity category, Canadian stocks have a 38-per-cent market share, U.S. equity funds have a 34 per cent share, developed international markets have a 13-per-cent share and emerging markets get a small 3-per-cent share. The remaining 12 per cent is in global funds, which typically include all the afore-mentioned categories.

Canadian aggregate bond funds, which combine government and corporate bonds maturing in the short, medium and long term, have a 31 per cent share of fixed income ETF assets. Another 10 and 15 per cent, respectively, are in funds focusing on government and corporate bonds. The other bond categories shake out like this: U.S. or North American bond ETFs at 9 per cent, foreign bond ETFs at 11 per cent, high yield bond ETFs at 4 per cent, preferred share/convertible bond ETFs at 8 per cent.

are doing. There’s a growing number of fully diversified portfolios that are packaged into a single fund. Use them for ideas on portfolio building, or just buy them directly. Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter.

 

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Portfolio mixology: How ETF investors are blending stocks and bonds in a tough yearTalk about asset allocation is everywhere in investing
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