Tag: canadian index fund

What is a Canadian Index Fund?

Canadian index funds are among the better financial innovations to come along in the past few decades.

A Canadian index fund can be a mutual fund or exchange-traded fund (ETF) whose goal is to equal the performance of a Canadian market index, such as the S&P/TSX 60. A market index aims to track the performance of a selected group of stocks. For example the S&P/TSX 60 is an index of the 60 largest companies that trade on the Toronto Stock Exchange.

Indexes are also used to determine how well a stock market is performing and are reported on in all forms of media. Most Canadian index funds are passively managed. That means that they don’t have a management team watching them at all times and making adjustments based on their short-term views of individual stock performance.

Canadian index funds may be updated only a few times a year, and for that reason they have much lower management fees. Some Canadian index-fund fees run as low as 0.10% per year, compared to 2.5% or more on many broker-sold mutual funds. Those high fees can eat into your profits. Canadian index funds are especially good for new investors who want to invest in a wide variety of stocks with a single investment. They also make good additions to RESPs and TFSAs. A Canadian index fund is also a sound investment for seasoned investors as well. When investing in stocks, as well as Canadian index funds, TSI Network recommends using our three-part Successful Investor philosophy:

  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; Consumer; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

Most investors who successfully build wealth over the long term follow certain investing practices. Find out what they are in our FREE investing guide, The 10 Best Practices of Successful Investors.

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Updates on six widely traded ETFs

May 6, 2016||How To Invest

These six ETFs hold mostly blue chip, widely traded stocks on Canadian and U.S. exchanges. All of them mirror, or track, the performance of major stock market indexes. That’s opposed to narrower indexes focused on, say, resources or themes such as solar power or biotech… Read More

Updates on six North American ETFs

July 10, 2015||How To Invest

Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index.

ETFs trade on… Read More

Five ETFs to track the major indexes

October 3, 2014||How To Invest

Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index.

ETFs trade on… Read More