A Multi-Asset Approach Can Benefit Investors in These Uncertain Times

Uncertain times call for thinking out of the box in the current market environment and one firm Canadian firm is showing that a multi-asset approach can benefit investors. It’s something that exchange-traded fund (ETF) investors can try to mimic using various funds focusing on different assets.

For Nicola Wealth Management, it pays to get active across a variety of asset classes.

“This is the environment in which active management of every single asset really shines, where it really makes a difference,” said John Nicola, Chairman and Chief Executive Officer of Nicola Wealth Management Ltd.

When Nicola mentions “every single asset,” he means it literally.

“Our philosophy is very simply this: In order to have a diversified portfolio, you should invest in assets that are representative of global wealth,” said Nicola. “[The] industry tends to sell and recommend assets that can be traded in public markets daily. Our view is that’s a fraction of global wealth, and private assets are a greater share of that wealth. Real estate, private equity, private debt, and mortgages are all part of the real-world assets. A large pension or family office would typically include all of these asset classes in their mix, but that’s a much more difficult task for individual investors.”

For ETF investors looking for diversification, here are a few funds that span across various assets for via active management:

  • Principal Active Income ETF (YLD): YLD is an actively managed fund that seeks to achieve its investment objective by investing its assets in investment grade and non-investment grade fixed income securities and in equity securities. The fund’s Sub-Advisors, actively and tactically allocates the fund’s assets among fixed income securities and equity securities in an effort to take advantage of changing economic conditions that the Advisor believes favors one asset class over another.
  • Principal U.S. Large-Cap Multi-Factor Core Index ETF (PLC): seeks to provide investment results that closely correspond, before expenses, to the performance of the Nasdaq US Large Cap Select Leaders Core Index. The index uses a quantitative model designed to identify equity securities of companies in the Nasdaq US Large Cap Index that exhibit potential for high degrees of sustainable shareholder value, growth, and strong momentum.
  • Principal Ultra-Short Active Income ETF (USI): seeks to provide current income. The fund is an actively managed ETF that seeks to achieve its investment objective by investing in fixed- and floating-rate securities. Under normal circumstances, the fund maintains an average effective maturity of three years or less and an average portfolio duration of one year or less.

For more relative market trends, visit ETF Trends.