6 hours Ago
North American markets have been riding highs in 2024, driven by interest rate cuts and increasing investor confidence that the powerhouse U.S. economy will avoid a recession.
Growth investors have been big beneficiaries of the market boom, including those who use low-cost robo-advisers. Canada’s major robo companies surveyed by The Globe and Mail generated after-fee returns ranging from 22 to 26 per cent in their growth portfolios for the year ended Sept. 30.
The performance is in line with the benchmarks: The Vanguard Growth ETF Portfolio VGRO-T and iShares Core Growth ETF Portfolio XGRO-T , were each up by about 25 per cent for the year ended Sept. 30. It’s the second year in a row that robos generated strong returns after posting losses in 2022 alongside their comparable ETF benchmarks.
Three-year annualized returns were more muted, ranging from about 5.5 to 8 per cent for the firms surveyed. Five-year annualized returns ranged from 7 to 10 per cent.
Robos continue to be a good option for investors looking to buy low-cost, diversified exchange-traded funds . Still, investors need to do some research before picking where to put their money (as they would with stocks or any investment). With ETFS, pay attention to fees, products and investment strategies.
Also, don’t choose a robo based solely on its past returns. As the saying goes, past performance is no guarantee of future results. A few notes on this year’s guide: What is a robo-adviser ? A primer: Click here to download an Excel version of the guide.
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