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:
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Two Canadian Bond ETFs offering low fees and high-quality holdings
Spurred by the dramatic impact of COVID-19 on the economy, the Bank of Canada cut its benchmark interest rate to record lows.
Even for our conservative investors, we caution against investing in bonds. Today’s low interest rates… Read More
Buying a base metals ETF, like one holding copper companies, is a great way to diversify your resources holdings beyond gold
We think that most investors should have some Resources & Commodities exposure as part of a well-balanced portfolio—10% to 20% is a good proportion for… Read More
These two blue chip ETFs hold mostly large-capitalization, widely traded stocks on the Canadian exchange. Both funds mirror, or track, the performance of major stock market indexes as opposed to narrower ones focused on resources or themes, such as solar power or biotech.
Blue chip ETFs… Read More
More and more, exchange-traded funds (ETFs) are finding their way into the portfolios of investors.
That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them… Read More
This ETF offers broad exposure to some of the best dividend-paying stocks listed in Canada.
While the fund focuses on dividend yields in choosing its individual holdings, it also considers the stock’s prospects for dividend growth and the sustainability of those payments for investors.
ISHARES CANADIAN SELECT… Read More
Find out which investment wins: Here’s our mutual fund vs ETF comparison
When considering a mutual fund vs ETF for your portfolio, it’s important to have a strong understanding of each.
Mutual funds are diversified portfolios of equities and investments in which small investors can take part… Read More
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
Today, we look at two Canadian ETFs that hold many of the Canadian stocks we recommend for 2021. iShares S&P/TSX 60 Index ETF and iShares Canada Select Dividend Index ETF mirror, respectively, sub-indexes holding the 60 most-heavily trades stocks and 30 of the highest-yielding dividend stocks… Read More
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
The major Canadian and U.S. stock markets have moved back up since their initial COVID-19 drop. Nonetheless, we think that if you can afford to stay in the market for several years or longer, now is still a good time to buy. We see ETFs… Read More
When ETFs vs index funds are in question, which ones work best in your portfolio?
When considering ETFs vs index funds for your portfolio, it’s important to have a strong understanding of each.
Exchange-traded funds hold baskets of stocks that represent stock indexes. ETFs are set up… Read More
Canadians are often blocked from buying U.S.-registered mutual funds unless those funds are also registered with provincial securities commissions.
However, exchange-traded funds (ETFs) listed on U.S. stock exchanges are available and generally offer lower fees.
Vanguard is one of the world’s largest investment management companies and offers… Read More
The best Canadian funds are ETFs or specialized mutual funds that aim to equal the performance of a Canadian market index
Canadian funds, specifically, 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… Read More
A Member of Pat McKeough’s Inner Circle recently asked for his advice on a fund that invests in dividend-paying European stocks.
Pat likes the high yield and the diversity of the ETF’s holdings, but he notes that the fund relies on options trading risk.
Q: Pat, I.. Read More
Investing in agriculture ETFs could be a smart move if you choose the right investments for the right reasons
An ETF investment can be a great low-fee way to hold shares in multiple companies with a single investment.
There are even ETFs that are involved in the… Read More
The Dogs of the Dow strategy focuses on dividends, which we think is a good idea. But beyond that, high dividend yields can be a warning sign, not a harbinger of rising stock prices
The Dogs of the Dow strategy involves buying the highest-yielding stocks in… Read More
This hyper-focused fund is concentrated heavily on the solar energy sector.
It has a reasonable MER and offers broad diversification if you want exposure to this area of the renewable energy industry.
INVESCO SOLAR ETF (New York symbol TAN) tracks solar-related companies (including technology firms and utilities)… Read More
A Member of Pat McKeough’s Inner Circle recently asked for his advice on a fund that bases its decisions on regular polling of the American public’s opinions of ESG business behaviour.
Pat likes the low MER but questions the value of its way of choosing investment… Read More
Here are some key tips to ensure that your investment portfolio holds the best income funds for retirees
Uncovering the best income funds for retirees is a key part of any strong financial plan. We recommend that you ensure the best results from that plan by… Read More
Precious metal ETFs have largely centered on gold stocks. We continue to see the outlook for that precious metal as positive, and for aggressive investors who want to hold precious metal ETFs, including a silver ETF, we have two of them below.
Most precious-metal stocks dropped,… Read More
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