I currently have 50% ZAG.TO, 35% XAW.TO, 15% VCN.TO.
My current compensation at work is highly correlated to the performance of the financial industry in Canada (i.e. the top 5 banks). XAW holds 10% non-Canadian banks and VCN is 25.5% Canadian banks. Therefore, I think it is appropriate for myself to move away from this basic portfolio. I have 3 thoughts at the moment:
I am thinking of adding an ETF that tracks small cap stocks - for example, something that tracks the Russell 2000 index (i.e. small caps) which tracks the 2000 smallest cap stocks in the Russell 3000. What would you suggest to a Canadian investor who want to invest in small cap stocks without financials exposure? On US markets, I could buy iShares Russell 2000 ETF. Should I open a US account for that?
Another method of diversifying away from financials might be to buy consumer staples ETF. For example, I might consider iShares S&P/TSX Capped Consumer Staples Index ETF. My other line of thought with this ETF is that consumer staples might fair better during a market crash: everyone needs to eat! This is backed up by the 2008 financial crash.
Another method of diversifying away from financials might be to buy utilities ETF. For example, I might consider ISHARES S&P/TSX CAPPED UTIL. Again, my line of thought with this ETF is that utilities might fair better during a market crash. This is backed up by the 2008 financial crash.
Which of these lines of thoughts do you agree with?