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  5. CBIL: I like what Global X has to offer in their line of ETF's. [Global X 0-3 Month T-Bill ETF]
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Investment Q&A

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Q: I like what Global X has to offer in their line of ETF's. However, I think I read one of your Q&A responses a couple months ago that their can be a concern with overloading the overall percentage of ones portfolio with a given ETF company. Did I understand that correctly? If so, just wondering what the potential consequences are in doing that, and if you do recommend spreading investments over a number of ETF companies.

Percentages are personal, but perhaps 5i has a ballpark-ish range that they would be comfortable with for a given ETF company (?)
Asked by James on December 09, 2024
5i Research Answer:

Typically, we would limit single exposure to an ETF management company to the 15% range. For a large company with highly liquid assets (such as Vanguard) we could move this up somewhat. ETF assets are segregated from management companies, so there is little direct risk really from the management company. However, risk can come from concentration if there is a large fund that owns illiquid assets. And, even though ETF assets might be safe, if there were a problem at a management company it is very likely investors would start selling their ETFs anyway, and this could force redemptions and hasty selling in the market, resulting in losses. ETF trading can also be halted for market or other reasons, so this is an additional reason to limit overall exposure.