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

The Best Performing ETFs Help You Maximize Your Portfolio Profits

The Best Performing ETFs Help You Maximize Your Portfolio Profits

The best performing ETFs have low management fees, diversification, and are more tax-efficient than many other investments
We still feel that investors will profit the most with a well-balanced portfolio of high-quality individual stocks, but ETFs can also play a role in a portfolio. Here are… Read More

This ETF’s high yield comes with higher risk

This ETF’s high yield comes with higher risk

This ETF’s 6.8% dividend yield looks very appealing, but it conceals several risks for investors.

The fund’s currency hedging only favours investors under certain conditions, and the ETF’s need to buy covered call options can run up brokerage commissions and diminish overall returns.

Turn the key… Read More

Two ETFs may be the best choices in bonds

Two ETFs may be the best choices in bonds

The Bank of Canada raised its benchmark interest rate from 1.00% to 1.25% in January 2018. The Canadian economy is growing and unemployment is low, although annualized inflation eased to 1.7% in January, from 1.9% a year earlier.

We continue to caution against investing in bonds… Read More

The Best Performing ETFs Provide Ways to Profit in Rising Markets

The Best Performing ETFs Provide Ways to Profit in Rising Markets

Investors are drawn to the best performing ETFs because they have low management fees, adequate diversification, and are more tax-efficient than many other investments
ETFs are unlike other investment innovations because they aim to simplify your investing, rather than complicate it. While there are many to… Read More

Tips for Investing in Index Funds Through the Use of ETFs

Tips for Investing in Index Funds Through the Use of ETFs

Investing in index funds can be easier and more secure if you use exchange traded funds (ETFs) because these modern investment products come with a tax-friendly structure and provide lower management fees than many competing options such as traditional mutual funds
Exchange traded funds (ETFs) are… Read More

Currency hedging comes at a cost

Currency hedging comes at a cost

Recent gains by the Canadian dollar have a number of investors looking at hedged ETFs. But the extra costs limit their appeal.
If you want to buy U.S. stocks and hedge against currency movements, you could buy a hedged ETF.

Hedged ETFs are ETFs sold in Canada… Read More

Selecting the best Canadian funds for your portfolio

Selecting the best Canadian funds for your portfolio

The best Canadian funds are ETFs or specialized mutual funds that aim to equal the performance of a Canadian market index.
Canadian index funds are among the better financial innovations to come along in the past few decades.

The best Canadian funds do show better long-run performance… Read More

Two ETFs offer low-fee access to global markets

Two ETFs offer low-fee access to global markets

Pennsylvania-based Vanguard Group administers about $5 trillion U.S. in assets spread across 370 mutual funds and ETFs. Canadians can buy Vanguard exchange-traded funds listed on stock exchanges.

ETFs can play an important role in portfolio diversification. Vanguard can help supply that diversification with these two… Read More