3 core lessons every investor needs to know

• Staying the course isn’t easy in times like these, but history shows making a plan and sticking to it could be critical to long-term investing success.
• Even missing just a few of the market’s best days can make a huge difference in your long-term returns.
• Keep close tabs on management fees, which can have an impact on the investment performance.
• The iShares Core ETF suite can help investors pursue their long-term goals, no matter the market climate.

Ten years ago, I was single, living in a one-bedroom apartment and very focused on my next trip to the mountains. Life today is quite different, with my focus split between my partner, our children, and the ups and downs of homeownership. Just as “adulting” was a life goal 10 years ago, so was the long-term performance of my investments.

As our iShares Core franchise globally marks its ten-year anniversary¹, here are three of the top lessons I’ve learned in the past decade of investing (and life).

It is important to create a game plan for reaching your financial goals. As baseball legend and folk wisdom sage Yogi Berra, once said: “If you don’t know where you are going, you might end up someplace else.”

Building an investment plan early, and sticking to it over the long-term, has helped me. But staying the course has not always been easy. Market noise is hard to ignore, especially as inflation and falling stock prices have dominated headlines in 2022. But think about this: The S&P 500 Index has experienced an average intra-year drop of nearly 15% in the past 20 years yet delivered positive annual returns in 15 of those years.²

Investors may find it difficult to stick to their financial plans while staring at a double-digit decline but staying invested is critical to long-term performance. After all, some of the worst days in the market can occur in close-proximity to the best days.³

Over the past 20 years, an investor who maintained exposure to the S&P 500 Index would have significantly outperformed an investor who sat out just the best five days of U.S. equity market performance.⁴ The difference would have been approximately $21,429 on an initial $10,000 investment (Figure 2).⁵

When it comes to expense ratios, you get what you DON’T pay for.

Our flagship Core Equity ETFs XIC, XUU, and XUS have outperformed their peers over 5 years and lower fees have played a part in that.⁶ Lower expense ratios mean lower hurdles for investors looking to reach their goals. These three ETFs are at parity with or cheaper than 96% of their actively managed counterparts.⁷ Since 2014, we’ve added value for investors by lowering fees on our Core ETFs on four separate occasions, saving our clients millions in management fees. The average management fee across our Core suite is now 0.11%.⁸

Our commitment to lowering expenses and providing investors a full complement of options continues as the iShares Core ETF suite enters its second decade. On January 11, 2023, we announced a management fee reduction for the iShares Core S&P 500 Index ETF (XUS, XUS.U) and the iShares Core S&P 500 Index ETF (CAD-Hedged) (XSP) to just 0.08% per year.

For many investors, creating a long-term plan starts with determining an asset allocation, or the mix of stocks and bonds that provides the balance of growth and safety aligned with their goals. Our lineup of Core ETFs may enable investors to put their plans to work in a convenient and simple way. Using just a handful of tickers, you can create a low-cost, diversified portfolio tailored to your specific goals and objectives.

iShares globally launched the Core suite of ETFs 10 years ago and in Canada we have since expanded to 32 Core ETF offerings, providing investors with building blocks for a diversified portfolio. Over the last 10 years, iShares Core ETFs have offered efficient market exposure while keeping costs low. Investors have taken notice, and we’ve seen assets grow over this period, with close to $50 billion in the Canadian Core suite today.⁹

We believe playing the long game is critical to successful investing. Maintaining a long-term mindset is key to helping investors create value, especially during turbulent market times. Consider iShares Core ETFs as a way to establish a foundation of a thoughtful investment plan.