dow

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 stocks....

Top 20 Dividend Trust, $10.75, symbol TTY.UN on Toronto (Units outstanding: 8.0 million; Market cap: $86.0 million; www.scotiamanagedcompanies.com), invests in an equally weighted portfolio made up of the 20 highest-yielding stocks in the S&P/TSX 60 Index. The trust has an MER of 0.88% and yields 6.5%. Top 20 Dividend Trust first sold units to the public at $10 and began trading on the Toronto exchange in June 2012. Many of the top-yielding stocks in the S&P/TSX 60 Index are former oil and gas royalty trusts. Seven of the trust’s 20 holdings are oil and gas stocks, including ARC Resources, Canadian Oil Sands, Crescent Point Energy, Encana Corp., Enerplus Corp., Husky Energy and Penn West Petroleum. Together, they make up a high 35% of the trust’s portfolio....

Effective September 23, 2013, the Dow Jones Industrial Average, which consists of 30 companies, removed Alcoa (symbol AA on New York), Hewlett-Packard (symbol HPQ on New York) and Bank of America (symbol BAC on New York) and replaced them with Nike (symbol NKE on New York), Visa (symbol V on New York) and Goldman Sachs (symbol GS on New York). The reasons for Alcoa’s removal centred around its low stock price and its declining role in a U.S. economy that is less oriented toward heavy manufacturing. The Dow Jones Industrial Average was created in 1896 by Charles H. Dow, one of the founders of The Wall Street Journal. The original index had 12 companies, but it gradually increased to 30 by 1928....

The U.S. is the sole country worldwide that requires its citizens to file an income tax return and report any income regardless of where they live or whether they hold dual citizenship in another country. That’s unlike Canada, which mainly bases its tax system on country of residence, like most other nations. The U.S. Internal Revenue Service (IRS) estimates that five to seven million American citizens reside abroad. Of that total, about one million live in Canada. Most U.S. citizens paying income taxes in Canada pay no additional U.S. income tax. However, they still have U.S. tax filing and compliance requirements....

SPDR DOW JONES INDUSTRIAL AVERAGE ETF $154.54 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average.

The fund’s top holdings are IBM, ExxonMobil, Chevron, 3M, Travelers Companies, McDonald’s, Johnson & Johnson, Caterpillar, United Technologies and Boeing. The fund’s expenses are about 0.17% of its assets.

SPDR Dow Jones ETF is a buy.
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ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $22.31 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.50%. It yields 4.5%.

The fund’s top holdings are Bonterra Energy, 6.5%; CIBC, 6.3%; National Bank, 5.9%; TD Bank, 5.7%; Bank of Montreal, 5.3%; Royal Bank, 4.5%; IGM Financial, 4.4%; Telus Corp., 4.2%; Bank of Nova Scotia, 4.1%; and BCE Inc., 4.0%.

The fund holds 53.4% of its assets in financial stocks. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.
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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 stocks....

BMO Junior Gold Index ETF, $8.50, symbol ZJG on Toronto (Units outstanding: 6.2 million; Market cap: $52.7 million; www.etfs.bmo.com), aims to mirror the performance of the Dow Jones North America Select Junior Gold Index. This index is made up of 30 junior gold stocks from Canada (84.8% of assets) and the U.S. (15.2%). The fund’s MER is 0.55%. The BMO Junior Gold Index ETF began trading on January 19, 2010. The fund’s top 10 holdings are Alamos Gold at 11.1%; B2Gold Corp., 9.6%; Coeur Mines, 8.1%; AuRico Gold, 7.8%; Detour Gold Corp., 7.0%; Argonaut Gold, 5.8%; Torex Gold Resources, 5.2%; Alacer Gold Corp., 3.7%; Centerra Gold, 3.7%; and Allied Nevada Gold, 3.7%....

It pays to be skeptical of investment performance calculations that companies calculate for themselves. This includes calculations by brokers, money managers and newsletter publishers. There are just too many ways to manipulate or “fudge” the numbers. For instance, a number of brokerage firms publish the results of what they refer to as “model accounts”. These hypothetical accounts supposedly measure the results you might enjoy by following the broker’s research. In reality, the hypothetical account does much better than the broker’s clients, because it enjoys advantages that are unavailable in real life. For example, I recall one model account to which the broker could post new buys or sells after the close of trading, anytime up till the opening of trading in the morning. It based results of these late additions on the closing price of the night before....

In recent months you may have come across a long-time investor saying in the news: Sell in May and go away. In a number of past years, the market has gone down between May and the October/November period. So, some advisors say you should sell some or all of your stocks in the month of May, and buy them back in the fall, presumably at lower prices. However, before acting on advice like this, it pays to remember that random events tend to occur in bunches. Sometimes, trading patterns turn up in the stock market and continue more often than not for years if not decades. Then they just as abruptly disappear. They are never consistent, much less dependable....