want to know a better way for everyday Canadians to start investing hey guys it's Adrian here the
Canadian in the t-shirt and today I'll be breaking down what is an ETF and why ETFs are a great
way to diversify your portfolio especially for beginners an ETF is an exchange traded fund it's
a collection of stocks and bonds all packaged together and it's traded on the stock exchange
hence the name when you buy a stock you're buying a unit of ownership of one single company but when
you buy an ETF you're buying a little piece of hundreds of companies all at once you've heard
the saying don't put all your eggs in one basket well ETFs can help solve this problem since you
can be Diversified across multiple companies and multiple sectors I'm happy to announce that this
is my second sponsored video ever thanks to BMO ETFs I've been a fan of BMO for years and I've
talked about their ETFs many times on this channel for free so I'm happy to say that this time I'm
getting paid I'll include the official disclaimer in the box below and and thank you to BMO
ETFs for sponsoring this video I do appreciate it investing with ETFs comes with a host of benefits
whether you're just getting started or if you've been investing for years they are easier to manage
than individual stocks ETFs come with built-in diversification instead of researching and
analyzing multiple stocks across the sectors meaning financials telecoms utilities energy
companies real estate Etc and then manually buying these individual stocks you can just buy one or
two ETFs that contain all of the sectors plus ETFs usually take care of rebalancing for you let's say
you want to maintain 20 of your portfolio into bank stocks and 20 into energy if Bank stocks
drop and energy shoots up that will throw off your sector waiting so you'd have to manually sell some
energy stocks and buy more Bank stocks to keep this 2020 split many ETFs will rebalance this for
you no work required on your end ETFs also have a low barrier to entry some of the most popular
Blue Chip stocks out there have very expensive share price and with most Brokers you can't buy a
fraction of a share so if you want to buy Nvidia stock you'll need at least 400 just to buy one
single share but with ETFs you can buy fractions of a stock if you buy an ETF like zsp it will only
cost you 65 and now you'll own a piece of Nvidia Microsoft Google Apple and 500 of the largest US
companies ETFs make it easier to get started even with smaller sums of money even better
ETFs are usually more cost effective than mutual funds since they charge lower management fees so
why choose BMO ETFs for one they're Canadian so they understand what Canadians are looking
for when it comes to investing goals and tax implications and they have a huge variety of funds
to choose from from General broad market index funds to more specialized portfolios focusing
on one particular industry or environmentally sustainable companies the options are end endless
if you see an ETF that starts with the letter Z it's probably a BMO ETF and so you know that
you'll be getting a great investment product at competitive fees let's take a look at some of my
favorite ETFs that I've invested in over the years starting with zre this is the BMO equal weights
reach ETF this is a real estate focused ETF holding 22 REITs or real estate investment trusts
these are companies that own hundreds of homes offices and commercial property and rents them out
for a profit so you as an investor get to collect a portion of that monthly rent as distributions
right now it's paying an annual yield about five percent as the name suggests this fund is equally
weighted each read makes up around four to five percent of the total fund so it's well
Diversified across the Canadian real estate market without being dominated by one or two big players
ETFs aren't only for stocks you can also buy Bond ETFs like zag this is an ETF that contains
hundreds of government and corporate bonds and you get to collect the interest income
from all of them I rarely buy individual bonds it can get tricky since you have to consider the
maturity date and the credit rating for each one buying a diversified mix of bonds with an ETF is
far easier you can also buy an all-in-one ETF like zeqt this is an ETF that contains multiple
ETFs it's a comprehensive fund that covers all of your bases with industry and Geographic
diversification with this ETF you'll be invested in the US market Canadian market and international
and Emerging Markets plus you'll get exposure to the largest companies as well as the small
cap mid cap companies these all-in-one ETFs can be a great choice if you're looking for a
passive hands-off approach to investing so there you have it those are the basics that you need
to know to start investing with ETFs thank you once again to BMO for sponsoring this video
and make sure to check out bmoetfs.com to learn more and find the right investment
for you I'll include links to everything in the description box below thanks everyone
and I'll see you guys on the next episode of the Canadian in a t-shirt bye guys