@TDAM_Canada
Investor Knowledge + 5 Minutes = New Thinking
U.S. small and mid-cap equities offer investors a dynamic opportunity set of companies that span from emerging small-cap stocks to former large-cap stocks that have stumbled back to mid-cap land. While many U.S. small and mid-cap stocks may not be household names in Canada, today's largest and most recognizable stocks were once small and mid-cap companies. Apple, Amazon, NVIDIA, and Tesla were all squarely in the U.S. small and mid-cap asset class at one point.
We recognize that U.S. small and mid-caps are not as well represented in investor portfolios in Canada, but an allocation based on an investors risk profile and goals, especially at a time when the U.S. equity market is being led by only a handful of large-cap stocks, today may be an opportune time to consider adding U.S. small and mid-cap stocks to your equity allocation for the benefits of diversification and an expected improved risk-adjusted return profile.
Focusing on an overlooked asset class
To help, TD Asset Management Inc. (TDAM) recently published an article titled Focusing on an Overlooked Asset Class. The article is an easy-to-read Q&A format and covers the "what, why and how" of investing in small and mid-cap equities and, of particular interest is section that discusses how adding small and mid-cap equities can possibly lead to higher returns with lower risk.
Dipping your toes
Adding small & mid-cap stocks to a diversified portfolio can lead to higher returns and lower risk. To help illustrate, the chart below shows the efficient frontier for a portfolio consisting of varying weights of the FTSE Canada Universe Bond Index and the MSCI World Index (blue line). Adding in a small allocation of small and mid-cap stocks to this portfolio can lead to higher returns and lower risk (green line). For instance, from the chart, a portfolio consisting of 50% FTSE Canada Universe Bond Index and 50% MSCI World Index has a 15-year annualized return of 7.5% and an annualized standard deviation of 6.3%. Adding in a 5% weight of small and mid-cap stocks increases the return to 7.6% and decreases the risk to 5.9%.
Solutions from TDAM
To harness the opportunity in the space, TD Q U.S. Small-Mid-Cap Equity ETF (TQSM) aims to provide exposure to a diversified portfolio of small- and mid-cap U.S. companies. By using a quantitative multi-factor approach, which seeks to optimize exposure to stocks that are expected to outperform the market by emphasizing style factors, TQSM aims to provide strong performance.
Currently, TQSM's largest factor exposures are to companies with conservative leverage and low-price volatility, companies with profitable and efficient business models and value with a reasonable quality factor. TQSM is also taking a cautious stance on credit risk. TQSM has performed well within this market environment, with returns for all periods up to 3 years above the benchmark¹. With less concentration risk and lower valuations than the S&P 500 Index along with higher returns and lower volatility than TQSM's benchmark, investors could consider adding TQSM to their U.S. equity allocation.
To view our entire ETF line-up, visit us at td.com/etfs and download our TD ETF Product Guide.
|
3个月 |
年初至今 |
1年期 |
2年 |
3年 |
Since |
|
|---|---|---|---|---|---|---|
|
TD Q U.S. Small-Mid-Cap Equity ETF (TQSM) |
10.36% |
10.35% |
12.77% |
12.58% |
14.44% |
9.50% |
|
Benchmark1 |
12.26% |
-1.54% |
3.46% |
4.55% |
6.94% |
8.97% |
Source: TDAM. As of January 31, 2024. ¹50% S&P Mid Cap 400 Total Return Index (C$), 50% SmallCap 600 Total Return Index (C$). ²November 20, 2019.
本文所含信息由道明资产管理有限公司提供，仅供参考。信息出自我们认为可靠的来源。图表仅供解说之用，并不反映任何投资的未来价值或未来表现。本信息并未提供财务、法律、税务或投资建议。具体的投资、税款或交易策略应根据每位投资者的目标和风险承受能力加以评估。
进行交易所买卖基金投资可能需要负担相关佣金、管理费以及支出。 Please read the prospectus and ETF Facts before investing. ETFs are not guaranteed, their values change frequently, and past performance may not be repeated.交易所买卖基金单位在证券交易所按市场价格进行买卖，因此收益会因经纪人佣金的支付而减少。
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道明交易所买卖基金由道明银行（Toronto-Dominion Bank）全资子公司道明资产管理有限公司（TD Asset Management Inc.）管理。
道明资产管理有限公司 (TD Asset Management Inc.) 是道明银行 (The Toronto-Dominion Bank) 的全资拥有附属机构。
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