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:
Invest mainly in well-established companies;
Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
Downplay or avoid stocks in the broker/media limelight.
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BMO S&P/TSX CAPPED COMPOSITE INDEX ETF $28.09 (Toronto symbol ZCN; TSINetwork ETF Rating: Conservative; Market cap: $7.3 billion) tracks the S&P/TSX Capped Composite Index. The index includes over 200 top-ranked Canadian stocks, which represent more than 90% of the Canadian equity market. Individual stock weights are capped… Read More
BMO COVERED CALL CANADIAN BANKS ETF $17.30 (Toronto symbol ZWB) holds shares of Canada’s six largest banks (CIBC, TD Bank, Bank of Montreal, Bank of Nova Scotia, Royal Bank and National Bank).
The fund started up in January 2011. Its MER is a relatively high 0.71%.
BMO Canadian High Dividend Covered… Read More
The U.S. housing construction and improvement markets have recovered strongly from the lows they hit at the start of the pandemic in March 2020. In fact, they have gone on to new highs.
That growth includes a big jump in late 2023. That rise was spurred… Read More
ISHARES S&P/TSX REIT INDEX ETF, $15.83, is a hold. The ETF (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) lets investors tap all 16 Canadian real estate investment trusts in the S&P/TSX REIT Index. Investors pay an MER of 0.61%, and the fund gives you a 4.7% yield.
The… Read More
Most top global markets have rebounded since their big drop at the outbreak of the pandemic. Going forward, we think the outlook remains positive for quality stocks. One way to profit from that—while cutting your risk—is to invest in top ETFs.
Here’s a look at four… Read More
Traditional telecommunications service providers, such as Telus and BCE, are trading at substantially lower valuations than other “infrastructure” type companies. This is not only true for Canadian companies, but also for U.S. and other similar companies in Europe.
Infrastructure-type companies such as telecommunications, pipeline, utility, and… Read More
Hackers, organized crime, and even state-sponsored groups are increasingly targeting the Internet-linked networks and databases of governments and businesses to gain access to confidential information and demand large ransom payments.
The lucrative nature of online crime, combined with a relatively low risk of being caught, and… Read More
This month we highlight two new funds: the first is a global equity ETF from a large Canadian asset manager with a considerable number of ETFs already in place; the second is a long-short equity ETF from a Canadian hedge fund manager.
MACKENZIE ALL-EQUITY ALLOCATION ETF $20.66 (Toronto… Read More
The COVID-19 pandemic caused a massive decline in Brazil’s tourism industry as international visitors declined from over 6 million in 2019 to less than 1 million by 2021.
But the tourists are now returning with estimates indicating that 6.7 million tourists visited in 2023.
Tourism is a.. Read More
Brazil is one of the top-10 global economies, and it is richly endowed with a range of base commodities.
The country has great long-term growth potential, although in the near term, it needs to get its economy back on track. Here is one ETF that provides… Read More
Telecommunications form an integral part of the economic infrastructure. Moreover, existing players benefit from strict licensing standards and high capital requirements that act as barriers to entry for any new companies. In addition, many of the major telecommunication companies have strong cash flows, high levels… Read More
SPDR S&P 500 ETF, $476.56 (New York symbol SPY; TSINetwork ETF Rating: Conservative; buy or sell through brokers; www.spdrs.com) offers investors exposure to the stocks in the S&P 500 Index; they are 500 major U.S. companies based on their market cap, liquidity and industry group. That broad exposure helped investors… Read More
Cybercrime can have major consequences for individuals, corporations, and governments, alike; the two highly publicized cyberattacks on T-Mobile last year provide good examples from the recent past. Meanwhile, people still working from home and growth in gaming have also spurred a jump in cyberattacks. Fraudsters… Read More
VANECK VECTORS VIETNAM ETF, $12.85, is a buy for aggressive investors. This emerging-markets ETF (New York symbol VNM) taps the leading Vietnamese firms as well as foreign firms that get a significant share of their revenue from this Southeast Asian nation. The fund started up in August 2009. Its… Read More
ISHARES MSCI TAIWAN INDEX FUND, $44.30, 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 21.9%… Read More
The major Canadian and U.S. stock markets, while still subject to volatility, continue to offer attractive returns for investors—especially if you buy the top stocks. All in all, we think that if you can afford to stay in the market for several years or longer,… Read More
Here’s a look at some of the factors that make the three ETFs we see as buys on pages 3 and 4 attractive—and why we don’t like the fourth.
Healthy profits in healthcare equipment
With the onset of the COVID-19 pandemic, healthcare equipment providers were hurt as… Read More
Higher interest rates in Canada, the U.S. and many other parts of the world have made high-yielding securities, including real estate investment trusts (REITs), much less appealing compared to bonds for income-seeking investors. In fact, over the past two years or so, ETFs focused on… Read More
BMO Asset Management recently added seven ETFs to their already extensive lineup. Here’s a look at two of these funds—one takes long and short positions in Canadian equities and a second aims to participate in U.S. stock gains while also providing some downside protection.
BMO LONG SHORT… Read More
Tourism is a major business in France. In 2019, 91 million international tourists visited the country while domestic travellers added another 152 million.
In fact, France is ranked as the most visited tourist destination in the world. International visitors come mostly from the U.K., Germany, Italy,… Read More