Actively-managed ETFs are different than most ETFs. Most ETFs practice “passive” fund management. Traditional ETFs stick with this passive management—they follow the lead of the sponsor of the index (for example, Standard & Poors). Sponsors of stock indexes do from time to time change the stocks that make up the index, but generally only when the market weighting of stocks change. They don’t attempt to pick and choose which stocks they think have the best prospects.
The MER (Management Expense Ratio) is generally much lower on passive ETFs than on conventional mutual funds or actively-managed ETFs. That’s because most passive ETFs take a much simpler approach to investing. Instead of actively managing clients’ investments, ETF providers invest to mirror the holdings and performance of a particular stock-market index.
Many brokers and portfolio managers have built a business around putting their clients into actively-managed ETFs—and making frequent changes in their ETF holdings. Their sales literature focuses on how easy it is to invest and profit in these investments.
It’s a great marketing gimmick, but it subverts the prime advantage of ETFs, which is low cost.
By the time the ETF specialists add their fees and commissions to actively-managed ETFs, their clients are paying the equivalent of mutual fund MERs to buy what amounts to a hodge-podge of index funds.
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This month we analyze two new offerings for ETF investors from Dynamic Funds (a fund manager wholly owned by Scotiabank). The first hands you an actively managed, international dividend-paying portfolio while the second aims to provide investors with exposure to the top internationally listed infrastructure… Read More
Sweden extensive list of government-sponsored benefits don’t alter the fact that it is a free-market economy. Still, it’s the blend of capitalism and socialism that has helped the country lower the gap between its rich and poor citizens to one of the narrowest in the… Read More
Sweden’s high tax rates support its extensive government benefits for citizens—from its 18 months of paid parental leave to its housing allowance for families and 20-somethings. But the high tax rates haven’t kept this nation from becoming one of the world’s most-economically competitive.
In fact, government… Read More
Another “megatrend” offering investors strong potential for long-term growth is the rising number of people worldwide moving to urban centres. Here are three ETFs that focus on mining, infrastructure, cybersecurity and other industries set to profit from urbanization. A supplement on page 40 offers you… Read More
Stock prices have dropped sharply in anticipation of a much wider spread of the coronavirus, and a deep economic setback that could result from that spread.
In a sudden and deep stock-market drop like this, it’s all too easy to respond impulsively or go to extremes… Read More
“Megatrends” are societal shifts with significant, long-term implications for the economy and the stock market. Once in full swing, these trends can be easy to track, although it is more difficult to pick out the companies that will most benefit from them. This month we… Read More
For our subscribers, we’ve long highlighted the benefits of “value investing.” As an investment style it has, over time, performed better than the overall market. The MSCI World Value Index, for example, has outperformed the MSCI World Growth Index by 2.1% per year since 1975… Read More
Companies involved in the production of carbon-based energy have generally underperformed for investors over the past several years (see table at right).
Volatile commodity prices are nothing new to the industry, with both oil and natural gas prices now at about half the highs reached in… Read More
The year started with a bang as market volatility spiked. The killing of Iranian General Qassem Suleimani by U.S. forces, the rocket attack on a U.S. military camp in Iraq, the signing of a Phase 1 trade deal between the U.S. and China, and the… Read More
This month we consider two new ETFs. The first offers you an actively managed portfolio of global dividend-payers; the second provides investors with some upside exposure to the S&P 500 along with some risk protection.
TD Bank launched the TD ACTIVE GLOBAL ENHANCED DIVIDEND ETF (Toronto symbol TGED) in… Read More
Learn everything you need to know in 'The Canadian Guide on How to Invest in Stocks Successfully' FREE Special Report from The Successful Investor.
How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger.
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What personal information do we collect?
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Does TSI Network Use the Information It Receives?
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