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.

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ETFs Library Archives

5G: More than just faster mobile phones

Mobile technology has come a long way since the first cellphone was commercialized in 1984. 2G brought text messaging, 3G brought Internet access to phones and 4G added higher speeds. 5G networks are the next generation of mobile connectivity, offering faster speeds, quicker response times,… Read More

Emerging-market consumers gain clout

There are four times as many consumers in middle-income countries than in high-income countries. Yet, their spending on consumer goods is half that of consumers in the developed world. Still, this is changing as more consumers in large-population countries, such as India and China, see… Read More

ETF performances for May

It rarely happens that fixed-income ETFs rank among the top-performing funds in any month, but May was such an exception. Bond yields are declining in many countries. That’s particularly so in the U.S. where investors are increasingly concerned about slowing economic growth. As bond yields… Read More

Leveraged ETFs add to cannabis risk

Exchange traded funds from Horizon ETFs use a broad range of strategies, including some that carry a higher risk of losses. Their latest additions to the “high risk” category are two leveraged marijuana stock ETFs.
Horizons already offers three ETFs that give investors participation in baskets… Read More

Nutrien ends North African deal

Morocco mining accounts for about 21% of the country’s total exports. The country is a top producer of phosphates and more-modest volumes of gold, silver, zinc, copper and cobalt. Morocco’s mining industry operates under a well-established regulatory code that supports a stable operating environment. That… Read More

Africa’s big potential comes with risks

The world’s second largest continent, Africa, has equally big potential. Where several of its national economies remain focused on growth, other African countries continue to grapple with weak corporate governance structures, poverty and military conflicts. Those factors have helped to hold back economic development. However,… Read More

Global concerns challenge 5G leaders

Japan, Europe, and the U.S. were early leaders in the development of mobile technologies. However, China’s strategic plan for 2020 and the Made in China 2025 initiative both identified 5G as an important emerging industry. The goal is for Chinese companies to become global leaders… Read More

These ETFs offer more than exposure to 5G

A new era of faster and more-reliable cellular infrastructure and services should start rolling out in late 2019. Apart from better mobile phone service, 5G will also offer significant opportunities for companies in several industries, such as health care and auto manufacturing, to enhance their… Read More

Emerging-market consumers wrote this success story

Flipkart is an e-commerce company based in Bengaluru, India, and founded in 2007 by Sachin Bansal and Binny Bansal. The company first focused on book sales, before expanding into other product categories such as consumer electronics, fashion and lifestyle products.
In 2008, the company received around… Read More

Pass on this ETF

HORIZONS BETAPRO S&P 500 2X DAILY BEAR ETF $14.00 (Toronto symbol HSD; TSINetwork ETF Rating: Aggressive; Market cap: $48.6 million) aims to offer two times the opposite of the daily performance of the S&P 500 Index. The fund’s MER is a high 1.15%
For example, when the S&P 500… Read More

Emerging markets drive their gains

Consumers in emerging markets still spend considerably less on goods than their peers in high-income countries. But the situation is changing. Rapid growth of the middle class in developing countries—especially in China and India—continues to provide a big boost to global consumer spending.
Here are two… Read More

Tap into the best REITs

ISHARES S&P/TSX REIT INDEX ETF $18.80 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds all 19 Canadian real estate investment trusts in the S&P/TSX REIT Index. The fund has an MER of 0.61%, and it currently yields a high 4.4%.
The ETF’s top holdings are RioCan REIT (14.1%),… Read More

U.S. tariffs help this ETF

INVESCO CHINA SMALL CAP PORTFOLIO ETF $24.01 (New York Exchange symbol HAO; buy or sell through brokers; www.invesco.com) aims to track the AlphaShares China Small Cap Index. It’s made up of the 305 Chinese stocks that foreign investors are allowed to hold and that have market caps… Read More

Here’s low-fee ways to invest internationally

Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. In all, it administers over $5.3 trillion U.S., spread across 415 mutual funds and ETFs.
Generally speaking, Canadians are blocked from buying mutual funds that are registered in the U.S. unless those funds are… Read More

Alberta’s production cuts did their job

Late last year Alberta’s previous NDP government ordered oil producers in the province to cut their total daily output.
The government-imposed reduction was the result of a lack of pipeline capacity that led to a glut of stored crude in the province and helped to push… Read More

Strong U.S. economy boosts its banks

A strong U.S. economy and higher interest rates are normally good for the profitability of big banks. The recent sharp declines in U.S. long-term interest rates and the expectations for fewer, if any, rate hikes by the U.S. Federal Reserve this year resulted in a.. Read More

Commodities play a key role in your portfolio

Commodities are the raw materials that production and manufacturing rely on. Investing in them can help investors diversify their portfolios and win greater protection from inflation.
However, commodities as a group have been out of favour for almost a decade and investors would rightly question the… Read More

ETF Performances for April

With the political debate in the U.S. heating up, politicians have taken a renewed interest in the cost and availability of healthcare products and services. This had a negative impact on the performance of healthcare stocks in April. The iShares US Medical Device ETF (New York symbol… Read More

These new ETFs target trend investors

The North American ETF universe has welcomed several new theme ETFs in recent weeks—each is meant to tap an investment trends. Those funds include a new U.S. marijuana ETF as well as a fund focused on companies at the forefront of the developing 5G network… Read More

H-shares provide market access

Hong Kong is largely seen as a gateway for foreign investors looking to invest in Chinese stocks outside of the select few offering American depository receipts (ADRs).
The stock exchange for this Chinese territory is Asia’s third largest (after Japan’s and China’s); it’s also the world’s… Read More