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:
Maximize your profits by reading this FREE Special Report,
Best Canadian ETFs: Canadian ETFs vs Mutual Funds, Canadian Index Funds and More.
LISTEN:
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
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 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 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
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
LISTEN:
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
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
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
Pat McKeough recently responded to an Inner Circle Member interested in his opinion of an ETF that covers big U.S. tech stocks, uses covered call options to raise income and hedges against movements in the U.S. dollar. Pat explains the complexities of the ETF and… Read More
We believe all Canadian investors should have 20% to 30% of their portfolios in U.S. stocks. However, you can also diversify by adding foreign ETFs in reasonable quantities, perhaps 10% of your holdings if you’re a conservative investor. The best ETFs offer low management fees and… Read More
LISTEN:
Germany faces a number of challenges—its population is getting older and its workforce will start to shrink from 2020 onwards. In addition, its largest export markets, including the U.S…. Read More
To create a balanced ETF portfolio, focus on funds that hold the kind of stocks we recommend
The best exchange-traded funds offer well-diversified, tax-efficient portfolios with exceptionally low management fees.
ETFs, with their relatively low management fees (MERs), have in large part eclipsed interest in mutual funds… Read More
At the heart of the ETF vs mutual funds pros and cons discussion is the fact that ETFs have much lower fees
You might say we specialize in “plain vanilla” stocks, bonds, ETFs—the ordinary kind, in other words, without lots of added features and fees. But… Read More
The best ETF selection strategies will focus on well-diversified funds holding top-quality stocks
In general, we like ETFs better than mutual funds. Their MERs (Management Expense Ratios) are typically much lower than those of mutual funds. That’s because most ETFs take a simpler approach to investing… 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
Traditionally, there have been several options for parents and grandparents looking to make investments for children. But here’s how to choose the best investments for children in 2018.
Taking the time to pick the right investments for children and grandchildren is a worthwhile endeavour. If the child is under… Read More
These two blue chip ETFs hold mostly large-capitalization, widely traded stocks on the Canadian exchange. Both 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
Here are three ETFs that mostly hold high-quality stocks widely traded on Canadian exchanges. Each fund mirrors the performance of a major stock index or sub-index. That’s different from ETFs focused on narrower indexes or themes such as biotechnology or solar power.
While you do pay… Read More
Pennsylvania-based Vanguard Group administers overt $5 trillion U.S. in assets spread across 370 mutual funds and ETFs. Canadians are frequently blocked from buying mutual funds registered in the U.S., and some Canadian funds are available in a limited number of provinces. However, Canadians can buy… Read More
LISTEN:
Massive growth in the export of cheap manufactured goods has driven China’s economic success over the past two decades. However, developed countries—and especially the U.S., given newly imposed tariffs—are… Read More
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