South Korea: More than an Olympic Host
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South Korea has been one of the most impressive performers among emerging market economies over the past 50 years. Rising wages and an aging workforce could slow growth, but… Read More
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:
- Invest mainly in well-established companies;
- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
- 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
Corporate-Class Mutual Funds: What to Know Before Investing
Corporate-class mutual funds let you switch between funds without having to pay capital gains taxes right away. But there are reasons why regular mutual funds, as well as ETFs, make better investments
Corporate class, or “tax-advantaged,” mutual funds are classes of funds that let you switch… Read More
Two of these Asian ETFs are buys right now
We believe conservative investors can have as much as 10% of their portfolios in foreign stocks. A good way to do that is by choosing exchange-traded funds (ETFs) with an overseas focus.
The best of those funds offer low management fees and well-diversified, tax-efficient portfolios of… Read More
How to Get into Investing: ETFs can be a good starting point
How to Get into Investing: ETFs can be a good starting point, especially for a smaller portfolio that’s just starting up. But watch out—there are both good and bad ETFs
We still feel that investors will profit the most with a well-balanced portfolio of high-quality individual… Read More
Vietnam: A rising star powered by exports
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For more than two decades, Vietnam has been one of the best-performing emerging-market economies. Business-oriented government policies, booming exports, and an expanding middle class increasingly contribute to that success… Read More
Top gold and silver stocks are in these ETFs
Gold now trades at $1,219 U.S. an ounce and silver at $14.38. Those prices are below the 2011 highs for both metals, but above the lows reached in 2015 (when gold fell to just over $1,000 an ounce).
These precious metals have gained over the… Read More
Investing in Mutual Funds for Beginners: Here are some key tips
Investing in mutual funds for beginners: Here are some of the best ways to do it—and also what to avoid
We think that mutual funds are okay to hold if you already own them, but we have moved away from recommending them in favour of lower-fee… Read More
How to Start Investing in ETFs: Here are some key tips
Are you wondering how to start investing in ETFs? Here are some tips on how to find the best performing ETFs—and how to stay out of the worst ones
Do you know how to start investing in ETFs?
We still feel that Successful Investors will profit the… Read More
These ETFs help you diversify with top U.S. stocks
We recommend that Canadian investors have as much as 20% to 30% of their portfolios in U.S. stocks in order to improve the diversification and growth potential of their investments. One convenient way to achieve this is through low-fee ETFs.
The three ETFs below mainly hold… Read More
Two of these three Canadian ETFs are buys
Each of these three ETFs hold mostly high-quality stocks traded on Canadian exchanges. Each fund mirrors the performance of a major stock index or sub-index. That sets them apart from ETFs that focus on narrower indexes or themes such as social media or solar power.
Although… Read More
Currency hedging comes at a cost with the iShares CORE S&P 500 Index ETF
Recent gains by the Canadian dollar have a number of investors looking at hedged ETFs like the iShares CORE S&P 500 Index ETF. But the extra costs limit their appeal.
If you want to buy U.S. stocks and hedge against currency movements, you could buy a.. Read More
New trade agreement spurs Mexico’s outlook
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The successful conclusion of NAFTA renegotiations—and the creation of the new United States-Mexico-Canada Agreement, or USMCA—should boost Mexico’s economic prospects. Combined with lower inflation and a boost to exports… Read More
These low-fee ETFs offer a sound way to diversify beyond Canada
Generally, Canadians are blocked from buying mutual funds registered in the U.S. At the same time, some Canadian funds are available in a limited number of provinces. However, Canadians can buy Vanguard exchange-traded funds listed on stock exchanges.
The concept of low-free index investing originated… Read More
A High Dividend ETF can be a sound investment option if the dividends are reliable
A high dividend ETF can offer lower-risk, higher-return opportunities—but only if the high yield is not a danger sign
The dividend yield is the percentage you get when you divide the current yearly dividend payment by the share or unit price of an investment. It’s an… Read More
The BMO Low Volatility Canadian Equity ETF — inadequate defense against future risk
Pat McKeough recently replied to a member of the Inner Circle looking for an ETF that offers protection from down markets. The BMO Low Volatility Canadian Equity ETF selects stock holdings based on their beta score. That’s a commonly used, but often misleading, measure of… Read More
Even the Top Hedge Fund Managers Have a Hard Time staying on Top
The top hedge fund managers may have lengthy streaks of success over time, but that success usually ends eventually
When one of the top hedge fund managers goes into a performance slump, media and investor reactions often leave us with an odd feeling. They make us… Read More
The Dogs of the Dow is an example of themed ETF investing—but it’s a flawed approach
ETF investing is one of the best financial innovations of our time but themed ETF investing—including the Dogs of the Dow—is a poor investing strategy. It’s not alone, however, with the number of those themed ETFs expected to grow in 2018 and beyond
Inner Circle members… Read More
Diversify now with these two promising international ETFs
If you already have U.S. stocks—and we suggest Canadian investors have 20% or more in their portfolios—you can also diversify beyond North America without the risk of buying individual stocks. Foreign-sector ETFs give you broad exposure to international markets with tax-efficient portfolios and low management… Read More
Brazil needs to harness its huge potential
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Several factors contributed to Brazil’s 2015-2016 recession, one of its worst: political turmoil, corruption at one of the country’s major corporations, volatile commodity prices, and high inflation. However, starting… Read More
Two ETFs hold the leading gold and silver stocks
Gold now trades at $1,209 U.S. an ounce and silver at $14.77. Those prices are well below the 2011 highs for both metals, but still above their 2015 lows.
Gold and silver have gained over the last couple years, helped by fears that growing government deficits… Read More
