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

Europe is emerging steadily from the crisis

The major European economies struggled for many years, with slow growth and high debt levels. As a result, the euro lost a lot of value against the U.S. dollar, while European stocks lagged U.S. equities.
However, Europe’s prospects look to be improving. Most European Union (EU)… Read More

The U.S. homebuilding landscape is strong

The U.S. housing market is in the process of recovering from a sharp COVID-19-induced setback in February and March of this year. Low mortgage costs, limited housing supply, and only moderate job losses among middle and higher-income workers are the main reasons for the housing… Read More

Here a look at two new TD ETFs for Investors

This month we look at two actively managed ETFs launched earlier this year by TD Asset Management. TD’s share of the the Canadian ETF market remains small, but the bank has increased its new offerings this year.
TD ACTIVE GLOBAL EQUITY GROWTH ETF $15.67 (Toronto symbol TGGR) aims… Read More

Technology led ETF gains in August

The month of August saw the strongest returns for U.S. technology, Internet, and growth stocks. The SPDR Tech Select ETF (XLK) gained 16.6%, and the Invesco Nasdaq 100 ETF (QQQ), 13.9%. U.S. Growth stocks as represented by the iShares Russell 1000 Growth ETF (IWF) also had a good month, with a.. Read More

Gain from Germany’s COVID-19 management

The German economy is the largest in Europe and ranks among the top five globally. The country was an early adopter of COVID-19 containment efforts—and its healthy fiscal situation before the pandemic has let it unleash substantial economic supports and a recovery package. All in… Read More

Pass on this ETF: ProShares UltraPro QQQ ETF

The PROSHARES ULTRAPRO QQQ ETF $132.07 (NASDAQ symbol TQQQ) aims to deliver 3 times the daily performance of the Nasdaq 100 Index.
The underlying Nasdaq 100 Index holds well-known stocks like Apple, Microsoft and Amazon. Launched in February 2010, the ETF has gathered $6.5 billion in assets and charges… Read More

Europe offers you a post-COVID-19 recovery

For the past decade or so, the European economy has lagged behind the faster-growing economies of the U.S. and China. The departure of the U.K. from the European Union also raised key questions about its overall stability.
However, the massive monetary and fiscal stimulus provided by… Read More

These ETFs tap homebuilder gains

The U.S. housing market has recovered from the drop in activity earlier this year following the start of COVID-19 lockdowns. Low mortgage rates and limited housing supply—along with buyers who are now looking for more space after being confined to their homes during the pandemic—continue… Read More

Copper rises on China rally

GLOBAL X COPPER MINERS ETF $22.60, is a hold. The ETF (New York symbol COPX; buy or sell through brokers; lets you track the Solactive Global Copper Miners Index, with 27 global mining and exploration firms. It started up in April 2010.
Canadian firms make up 32.6% of the… Read More

Two precious metal ETFs to buy now

Most precious-metal stocks dropped, along with stock markets, in March 2020. They then quickly reversed that trend to soar for investors. In fact, gold recently jumped to over $2,000 U.S. an ounce for the first time ever. Gold stocks also jumped.
The extra burst reflects investor… Read More

Invest in Asia’s rebound with these ETFs

Most major global stock markets have recovered from the March 2020 declines they experienced with the outbreak of COVID-19. We like the prospects of the best of them going forward—and one way to profit, while also cutting your risk, is to invest in ETFs. Here’s a.. Read More

Two low-fee ways to invest outside Canada

If you’re looking for an ETF with top holdings and exceptionally low fees, then Pennsylvania-based Vanguard Group offers you strong options. Vanguard is one of the world’s largest investment management companies. In all, it administers over $6.2 trillion U.S. for investors spread across 420 mutual… Read More

We think passive ETFs beat active over time

For some time, most U.S. fund managers have focused on offering passive ETF management (more on that below). They do not offer actively managed ETFs because of the reluctance of those funds to meet daily disclosure requirements on portfolio actions.
Meanwhile, in Canada, the rules and… Read More

Emerging Asia offers you long-term growth

Emerging economies in Asia, including China, India, and Malaysia, have been on a very strong growth trajectory for several decades. China and India now count among the largest economies in the world and millions of residents of these countries have been lifted out of poverty… Read More

Precious metals lead the way

The month of July saw strong returns for investors in precious-metals ETFs. The iShares Silver ETF (SLV) gained 27.9%, the VanEck Gold Miners ETF (GDX) was up 13.5%, and the SPDR Gold Shares ETF (GLD) rose 9.8%. Other ETFs that made significant advances were the iShares U.S. Home Construction ETF (ITB) which gained… Read More

We see only one of these new ETFs as a buy

This month we look at two new ETFs launched by U.S. providers. The first promises to provide some protection when markets decline, and the second invests in companies that will benefit from the work-from-home trend.
NATIONWIDE RISK-MANAGED INCOME EQUITY ETF $27.45 (New York symbol NUSI) seeks to provide regular… Read More

These actively managed ETFs hold appeal

Exchange-traded funds have traditionally offered investors three main advantages: ease of trading, low fees, and transparency. We still believe passively managed ETFs—which simply track benchmark indexes—do the best job of meeting those goals. However, actively managed ETFs, where fund managers tinker with their holdings to… Read More

Active ETFs face key challenges

Actively managed exchange-traded funds are very similar to actively managed mutual funds. In both cases, the portfolio managers strive to beat their benchmarks.
However, whether they aim to use fundamental research, or computer driven analysis, actively managed mutual funds have struggled over the past decade to… Read More