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

Consumer-focused ETFs add stability

Consumer companies such as Walmart, Kellogg and Nestle provide basic goods that consumers need, even during a recession. It is therefore not surprising that these companies have relatively consistent revenue and profit histories and are able to maintain their dividends even during tough economic times.
These… Read More

Europe’s troubles make top firms cheaper

High inflation, rising interest rates and the war in Ukraine have all combined this year to hurt European economies and stocks prices.
Still, Europe is home to some of the world’s leading companies—and many of them are now trading are attractive prices.
The top holdings of the… Read More

Here are new ETFs for Canadian investors

This month we highlight a U.S. small and mid-cap ETF that aims to invests in companies with long-term competitive advantages. We also look at a “green” bond ETF from CI Asset Management.
VANECK MORNINGSTAR SMID MOAT ETF $25.76 (New York symbol SMOT) invests in U.S.-domiciled small and medium-size… Read More

Southern Copper is a key stock in this Peru fund

Southern Copper Corp. (symbol SCCO on New York)is one of the largest copper producers in the world, with operations in Mexico and Peru. More than 80% of its revenue comes from copper sales, with smaller contributions from molybdenum, silver, and zinc. Since 1996, the company’s… Read More

Peru comes with political risks, big potential

Peru is best known for its stunning mountain landscapes, llamas, and the famous Machu Picchu, one of the new “seven wonders of the world.” But the country is also a major producer of commodities such as copper and silver and various agricultural products.
ISHARES MSCI PERU… Read More

Consumer staples offer strength in downturns

Traditionally, the price of most stocks, and the ETFs that hold them, drop during market declines. However, certain segments generally perform better than the overall market. Below, we highlight three ETFs focused on firms that produce and sell consumer staples. They should, as in past… Read More

Pass on this ETF

ADVISORSHARES RESTAURANT ETF $19.05 (New York symbol EATZ) is an actively managed fund that invests globally in restaurants, bars, and food-service companies.
The portfolio is relatively concentrated, with 50 holdings, among them substantial individual holdings in Arcos Dorados (a large McDonald’s franchisee in Latin America), Restaurant Brands International,… Read More

European ETFs offer long-term promise

European stocks continue to face near-term challenges as the war in Ukraine, record inflation and the continuing impact of the COVID-19 pandemic weigh on their prospects. Still, the long-term outlook for top European companies is strong, and many of these leading companies derive a significant… Read More

Buy Japan’s top performers

ISHARES MSCI JAPAN INDEX FUND, $50.28, is a buy. The ETF (New York symbol EWJ; buy or sell through brokers; us.ishares.com) aims for the return of the Morgan Stanley Capital International (MSCI) Japan Index.
The fund’s top holdings include Toyota, 5.1%; Sony Corp., 2.9%; Keyence (sensors), 2.6%; Mitsubishi UFJ Financial,… Read More

Global ETFs: Four buys and two holds

All of the major global stock markets fell at the outbreak of COVID-19. Many top markets have since rebounded. We think the outlook remains positive for quality stocks, and one way to profit from that—while cutting your risk—is to invest in top ETFs.
Here’s a look… Read More

Emerging markets are attractive, but with risks

Many investors have lost interest in investing in emerging markets (“EMs”) given their recent poor performance. Still, EM fundamentals remain sound, despite COVID-19-induced setbacks and higher inflation. The key emerging markets are also home to many top-notch global companies, available at reasonable, if not attractive… Read More

Cyberattacks: Big need for cybersecurity

Hackers, organized crime, and state-sponsored actors are increasingly targeting Internet-linked networks and databases to gain access to confidential information and extract large ransom payments.
The lucrative nature of online crime, combined with a relatively low risk of being caught, and a massive and growing target market,… Read More

Here are new ETFs for Canadian investors

This month we highlight a carbon credit ETF from TD Asset Management as well as an actively managed fintech ETF from Blackrock.
TD GLOBAL CARBON CREDIT INDEX ETF $36.87 (Toronto symbol TCBN) seeks to track the performance of a global carbon credit index, which measures the investment return of… Read More

Indonesian tourism is regaining momentum

Tourism is an important part of the Indonesian economy, contributing directly and indirectly about 5% to the country’s GDP in normal years.
In 2019, Indonesia welcomed 16 million international tourists, who spent $17 billion during that year. The industry is credited with employing an estimated 4.7… Read More

Indonesian ETF is a gateway to Asian growth

Indonesia’s 280 million citizens make it the world’s fourth-most-populous country and Southeast Asia’s largest economy. The nation’s successful and popular president was the first leader to emerge from outside of Indonesia’s military elite. His government is now focused on keeping the recovery from the pandemic… Read More

Emerging funds can offer long-term potential

With the current market troubles, many ETFs focused on emerging markets have dropped more than the overall markets. That’s in large part because a growing U.S. economy and sharply rising interest rates have pushed up the U.S. dollar. This typically results in capital flowing to… Read More

Pass on this ETF

SIMPLIFY VOLT CLOUD AND CYBERSECURITY DISRUPTION ETF $5.95 (New York symbol VCLO) is an actively managed fund that invests in companies that it believes are positioned to lead developments in cloud-based data management and security.
The portfolio is concentrated, with large holdings in Crowdstrike, Cloudflare, Microsoft, Alphabet, Apple,… Read More

Bright outlook for cybersecurity ETFs

Cybercrime can have major consequences for individuals, corporations, and governments, alike; recent highly publicized cyberattacks on Colonial Pipeline and meat producer JBS provide good examples. Meanwhile, people working from home and the growth in gaming have also spurred a jump in cyberattacks. In addition. fraudsters… Read More

Taiwan offers top stocks

ISHARES MSCI TAIWAN INDEX FUND, $45.22, is a buy for aggressive investors. The ETF (New York symbol EWT; buy or sell through brokers) gives you direct exposure to some of the top public companies of this East Asian powerhouse economy.
The fund’s largest holding is Taiwan Semiconductor at 20.9%… Read More

These ETFs give you the best of top indexes

The major Canadian and U.S. stock markets, while still subject to volatility, 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… Read More