Lecture Notes: Introduction to Beimo Spider Select Sector Index ETFs

Overview

• Sponsor: Beimo ETFs
• Topic: Introduction and discussion of Beimo Spider Select Sector Index ETFs in Canada.

Key Points

Introduction to Beimo Spider Select Sector Index ETFs

• Provider: Manufactured by SSGA (State Street Global Advisors).
• Coverage: Tracks 11 sectors as categorized by GIX (Global Industry Classification Standard).
  • Sectors include: Consumer services, consumer discretionary, consumer staples, technology, etc.
• Canadian Introduction: Previously not available in a Canadian product, now available in Canadian dollars.

Benefits of Canadian Listing

• Currency: Eliminates the need for currency conversion from CAD to USD.
• Tax Efficiency: Mitigates tax friction as they are Canadian listed and trade on a Canadian exchange.
• Options: Available in both hedged and unhedged versions.

Fund Usage and Strategies

• Static S&P 500 Exposure: Traditional S&P 500 investors have a static sector allocation.
• Granular Sector Exposure: Allows investors to target individual sectors without picking individual stocks.
  • Example: Investing in healthcare for exposure to companies like Eli Lilly, UnitedHealth, J&J, etc.
• Sector Skewing: Overweight certain sectors beyond S&P 500's natural allocation.
  • Example: Use ticker ZXLU for increased utilities exposure.
• Economic Cycle Moves: Adjust sector weights to align with economic cycles, e.g., recession or rising interest rates.
  • Defensive sectors like consumer staples during downturns.
  • Financial sector (e.g., ticker ZXLF) during rising interest rates.

Currency Strategy

• Hedged vs. Unhedged: Express views on currency by selecting hedged or unhedged ETF versions.
• Neutral Approach: Option to go 50/50 hedged and unhedged.

Sector Performance Illustration

• Sector Returns: Chart showing varying sector performances by year.
  • Example: In 2020, tech gained 40% while energy lost nearly the same amount.
  • Example: In 2022, energy was a strong performer with over 50% growth.

Fees

• Fee Structure: Simple, competitive, fair fees at 0.21%.

Summary

• Canadian Advantage: Allows Canadians to access U.S. sector exposure without currency conversion.
• Portfolio Customization: Offers creative ways to adjust and build portfolios.
• Investor Options: Flexibility with hedged or unhedged choices.

Conclusion

• Engagement: Links provided for further research and due diligence.
• Feedback: Invitation for audience comments on the new fund launch.
• Sponsor Acknowledgment: Gratitude extended to Beimo ETFs for sponsorship.