ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Exchange traded funds trade on stock exchanges, just like stocks. Investors can buy them on margin, or sell them short. The best exchange-traded funds offer well-diversified, tax-efficient portfolios with exceptionally low management ETF fees. They are also very liquid.

Investors use ETFs in a variety of ways, and some investors work only with ETFs and no other type of investment in portfolio creation.

An amazing aspect of ETFs is their diversity. Some investors may create an entire portfolio solely from a few well-diversified ETFs.

ETFs trade on stock exchanges, just like stocks. That’s different from mutual funds, which you can only buy at the end of the day at a price that reflects the fund’s value at the close of trading.

Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds.

As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital gains taxes generated by the yearly distributions most conventional mutual funds pay out to unitholders.

ETFs have a place in every investor’s portfolio, at TSI Network we also recommend using our three-part Successful Investor strategy:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

Maximize your profits by reading this FREE Special Report,
Best Canadian ETFs: Canadian ETFs vs Mutual Funds, Canadian Index Funds and More.

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ETFs Post Archives

How to create the best retirement portfolio through diversification

How to create the best retirement portfolio through diversification

Realistic expectations and an eye toward diversification will help you develop the best retirement portfolio, and give you built-in security.

Diversification should be the focus of investors looking to build the best retirement portfolio. Tempering expectations on the size of your return is another important consideration… Read More

Why investors should be wary of many new ETFs

Why investors should be wary of many new ETFs

While new investment products can be enticing, a lot of new ETFs mean higher prices and more risk.

The best ETFs represent a low-cost, tax-efficient way for investors to make money in the long term.

However, as often happens after the successful launch of any new investment… Read More

TSX ETF investing: 5 tips for successfully picking the right ones

TSX ETF investing: 5 tips for successfully picking the right ones

With all the TSX ETF investments available, it’s not too difficult to diversify your portfolio. Here’s how.
There are hundreds of ETF opportunities on the Toronto Stock Exchange (TSX) sponsored by investment managers like BlackRock Inc., BMO Asset Management and Horizons ETFs Management. The best TSX… Read More

ETF Stocks: Precious metal ETFs to hold

ETF Stocks: Precious metal ETFs to hold

In 2011, gold shot up to a high of $1,950 U.S. an ounce, and silver reached a peak of $48.58.

Gold prices then fell steadily, dropping to $1,050 an ounce in December 2015 for the first time since early 2010. That month, silver also declined to… Read More

Two Canadian ETFs hold most of Canada’s best stocks

Two Canadian ETFs hold most of Canada’s best stocks

Today, we look at two Canadian ETFs that hold many of the Canadian stocks we recommend for 2017. iShares S&P/TSX 60 Index ETF and iShares Canada Select Dividend Index ETF respectively mirror subindexes holding the 60 most-heavily trades stocks and 30 of the highest-yielding dividend… Read More

Follow this successful ETF strategy for maximum returns

Follow this successful ETF strategy for maximum returns

Having a sound ETF strategy will help you target the best ETFs—and maximize your gains
Unlike many mutual funds, Exchange Traded Funds don’t load you up with heavy management fees, nor do they tie you down with heavy redemption charges if you decide to get out… Read More

Two ETFs are a ticket to strong overseas investing

Two ETFs are a ticket to strong overseas investing

We think conservative investors can hold up to 10% of their portfolios in foreign stocks. One way to do that is by choosing exchange-traded funds (ETFs) with an overseas focus.
The best ETFs continue to offer very low management fees and well-diversified, tax-efficient portfolios of high-quality… Read More

Should you use a robo-advisory in your ETF investing?

Should you use a robo-advisory in your ETF investing?

A robo-advisory may be better than a bad broker, but there are still downfalls
A robo-advisory involves automated, Internet-based advice and portfolio management services.
A robo-advisory may offer beginning investors a more efficient, lower-cost investment approach, compared to what’s now open to them. Unfortunately, robo-advisors are likely… Read More

How to pick the best Canadian index funds

How to pick the best Canadian index funds

Canadian index mutual funds were among the better financial innovations to come along in the past few decades, but in 2017, ETFs may well have eclipsed them.
Canadian index mutual funds are specialized mutual funds that aim to equal the performance of a Canadian market index,… Read More

Two ETFs surge with the rise in emerging markets

Two ETFs surge with the rise in emerging markets

We think conservative investors can hold up to 10% of their portfolios in foreign stocks. One way to do that is by choosing exchange-traded funds (ETFs) with an overseas focus.
The best ETFs continue to offer very low management fees and well-diversified, tax-efficient portfolios of high-quality… Read More