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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Five ETFs to buy—and one to avoid

July 11, 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 stock… Read More

Five ETFs to buy, one to avoid

March 7, 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 stock… Read More

Our latest advice on six popular ETFs

December 6, 2013||How To Invest

Exchange traded funds (ETFs) are set up to mirror the performance of a stock-market index or subindex. 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 stock… Read More

Five North American ETF buys

August 9, 2013||How To Invest

Exchange-traded funds (ETFs) are set up to mirror the performance of a stock-market index or subindex. 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 stock exchanges, just like… Read More

Easy ways to track the top stock indexes

May 3, 2013||How To Invest

Most U.S. markets have risen lately, while Canada’s resource-heavy Toronto Stock Exchange has lagged. But as always, both remain subject to unexpected downturns. Even so, the long-term outlook is for higher stock prices. One way to profit from rising markets is to add exchange traded… Read More

Can you comment on any of the following Vanguard ETFs: Vanguard Canadian Short-Term Bond Index ETF; Vanguard MSCI Canada Index ETF; Vanguard Total Stock Market ETF; and Vanguard MSCI EAFE ETF? Thank you! I value your opinions.

October 30, 2012||How To Invest

Vanguard Canadian Short-Term Bond Index ETF, $24.96, symbol VSB on New York (Shares outstanding: 1.7 million; Market cap: $42.4 million; www.vanguard.com), mirrors the performance of the Barclays Global Aggregate Canadian Government/Credit 1-5 Year Float Adjusted Bond Index.

This index consists of a wide range of investment-grade… Read More

Easy ways to track the major indexes

October 5, 2012||How To Invest

Most stock markets have risen lately. But as always, they remain subject to unexpected downturns. Even so, the long-term outlook is for higher stock prices.

One way to profit from rising markets is to add exchange traded funds (ETFs) that track major stock indexes to your… Read More