John DeGoey, portfolio manager at Industrial Alliance Securities

Focus: Personal finance and ETFs
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MARKET OUTLOOK
Economic growth in the Western world is stalling due to high debt levels, demographic trends and industrial automation. The only part of the world that is likely to see sustained growth going forward is emerging markets. Traditional equity investments might do comparatively poorly over the next decade or more, since there is really no way left to stimulate growth. Even with all this stimulus and low inflation, overall large macro trends are ensuring that economic growth will continue to be modest in the developed world.

As a result, people should plan for lower future returns compared to anything they might have experienced over the past few decades. Furthermore, it is considered a “best practice” to reduce your return assumptions further to account for both the cost of investment products and the cost of investment advice. In a low-return world, managing cost will be more important than ever before.

TOP PICKS

VANGUARD FTSE EMERGING MARKETS ALL CAP INDEX ETF (VEE.TO)     
This is the single most consistently-recommended ETF on my product shelf. It offers great diversification and low-cost access to the one part of the world that is actually showing some tangible economic growth. Risk and reward are related and I would expect any emerging market ETF to be relatively volatile. With that said, the growth prospects are compelling.

HORIZONS MEDICAL MARIJUANA LIFE SCIENCES ETF (HMMJ.TO)
This is a more diversified way of entering into the nascent medicinal marijuana market. The product has dropped a fair bit since it was released, but the bottom may be near. At any rate, this is being recommended as a more diversified way of accessing a sector that has been getting a great deal of press.

ISHARES S&P/TSX GLOBAL GOLD INDEX ETF (XGD.TO)
Buying gold-producing companies is simply a good way to improve risk-adjusted returns. For most people, a modest (three per cent to five per cent) stake is all that is needed.
 

PAST PICKS: MAY 2, 2016

ISHARES INDIA INDEX ETF (XID.TO)

• Then: $25.83
• Now: $35.55
• Return: 37.63%
• TR: 38.13%

VANGUARD FTSE EMERGING MARKETS ALL CAP INDEX ETF (VEE.TO)

• Then: $26.29
• Now: $33.49
• Return: 27.38%
• TR: 30.06%

VANGUARD FTSE CANADIAN HIGH YIELD INDEX ETF (VDY.TO)

• Then: $29.10
• Now: $32.78
• Return: 12.64%
• TR: 17.02%

TOTAL RETURN AVERAGE: 28.40%