In some circles it's called a "liquidity sleeve"—that sliver of exchange-traded fund (ETF) exposure that can keep at least a portion of your exposure liquid in case you need to liquidate in a hurry. For active managers, however, ETFs have another use: as a tool to avoid the dreaded "cash drag"— that 3% to 5% hit on performance that comes from holding the necessary cash to manage investor redemptions. But does it always work?
Institutional Uses of ETFs
Greg Walker, CFA, Managing Director, Head of iShares Institutional Business BlackRock Canada
Resources you'll need to learn about ETFs, their benefits, and how to use them in your investment portfolio.