etf

Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. In all, it administers almost $3 trillion U.S. in 170 mutual funds. Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions. For that matter, some Canadian funds aren’t available in all provinces. Canadians can, however, buy Vanguard exchange traded funds that trade on stock exchanges. We don’t recommend all of Vanguard’s ETFs, but here are two we do see as low-fee buys....

ISHARES CDN REIT SECTOR INDEX FUND $15.10 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 Canadian real estate investment trusts in the S&P/TSX Capped REIT Index. iShares CDN REIT’s expenses are 0.60% of its assets. The fund yields 5.5%. The ETF’s largest holding is RioCan REIT at 20.1%, followed by H&R REIT (14.4%), Smart REIT (8.5%), Canadian Apartment Properties REIT (7.9%), Canadian REIT (7.7%), Allied Properties REIT (6.7%), Cominar REIT (6.1%), Dream Office REIT (5.6%), Boardwalk REIT (5.1%), Artis REIT (4.6%), Granite REIT (4.4%), Crombie REIT (2.5%), Dream Global REIT (2.4%), Pure Industrial REIT (2.1%) and Northern Property REIT (1.5%)....

ISHARES INDIA 50 ETF $27.86 (Nasdaq symbol INDY; buy or sell through brokers; us.ishares.com) is an ETF that invests in the 50 largest, most liquid Indian securities. The fund’s top holdings are Infosys (information technology), 7.9%; Housing Development Finance, 7.0%; ITC Ltd. (conglomerate), 6.6%; ICICI Bank, 5.7%; Reliance Industries (conglomerate), 5.5%; HDFC Bank, 4.9%; Tata Consultancy Services (information technology), 4.5%; Larsen & Toubro (conglomerate), 4.1%; Sun Pharmaceutical Industries, 3.3%; and Tata Motors, 2.6%. The ETF has a 0.93% expense ratio. The iShares India 50 ETF rose as high as $30 early this year in the wake of Narendra Modi’s May 2014 election as prime minister. However, it has since moved down to today’s price along with the slowing global economy. Modi has also faced difficulties getting reforms through the upper house of parliament, where he doesn’t hold a majority, These reforms include a bill to make it easier for the government to expropriate land for transportation, industrial and urbanization projects; a goods and services tax; more flexible labour laws; and the sale of state-owned assets....

Purpose Core Dividend Fund ETF, $24.97, symbol PDF on Toronto (Units outstanding: 8.2 million; Market cap: $204.8 million; www.purposeinvest.com), holds U.S. and Canadian stocks its managers see as being able to sustain and grow their dividends. The ETF yields 3.3%. The fund holds mostly high-quality companies. Its holdings include Rogers Communications, Peyto Exploration, CIBC, SNC-Lavalin, BCE, Altria Group, Bank of Montreal, General Motors and Philip Morris. The Purpose Core Dividend Fund ETF holds 61.0% of its funds in Canadian stocks, 36.6% in U.S. stocks and 2.4% in cash. Its breakdown by industry is as follows: Financials, 14.9%; Utilities, 14.7%; Energy, 14.5%; Real Estate, 14.4%; Consumer Discretionary, 12.3%; Telecom Services, 10.0%, Industrials, 7.5%; Consumer Staples, 5.2%; and Materials, 4.2%....

ISHARES S&P/TSX 60 INDEX ETF $20.99 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.

The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include.

The index’s top holdings are Royal Bank, 8.3%; TD Bank, 7.3%; Bank of Nova Scotia, 5.7%; CN Railway, 4.7%; Suncor Energy, 3.9%; Bank of Montreal, 3.8%; Valeant Pharmaceuiticals, 3.8%; Enbridge, 3.7%; BCE, 3.2%; Manulife Financial, 2.9%; TransCanada Corp., 2.9%; CIBC, 2.9%; Canadian Natural Resources, 2.8%; CP Rail, 2.5%; and Potash Corp., 2.5%.

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GLOBAL X COPPER MINERS ETF $5.26 (New York symbol COPX; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Copper Miners Index, which includes 20 to 40 international companies that mine, refine or explore for copper. Germany-based Structured Solutions AG created this index.

Canadian firms make up 38.8% of the ETF’s holdings. It also includes companies based in Australia (15.6%), Mexico (5.5%), Peru (5.4%) and Poland (5.0%). The fund’s MER is 0.65%.

Its top holdings are Sandfire Resources at 10.4%; Southern Copper, 7.9%; Oz Minerals, 7.7%; Grupo Mexico, 6.9%; Vedanta Resources, 6.8%; Lundin Mining, 6.3%; Antofagasta plc, 5.9%; KGHM Polska Miedz, 5.7%; Turquoise Hill, 5.6%; Jiangxi Copper, 5.2%; and Freeport- McMoRan, 4.4%.

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GLOBAL X SILVER MINERS ETF $7.41 (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index. This index includes 25 international firms that mine, refine or explore for silver. It was developed by Germany-based Structured Solutions AG.

Canadian firms make up 58.0% of the fund’s holdings, but it also includes miners in the U.S. (12.3%) and Mexico (11.2%). Its MER is 0.65%.

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ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $8.55 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index, which is made up of 38 gold stocks from Canada and around the world. The ETF began trading on March 23, 2001. Its MER is 0.61%. The fund’s top holdings are Goldcorp at 13.6%; Newmont Mining, 11.5%; Barrick Gold, 9.7%; Franco-Nevada Corp., 9.3%; Agnico-Eagle Mines, 7.6%; Randgold Resources (ADR), 7.4%; AngloGold Ashanti (ADR), 4.3%; and Royal Gold, 4.0%.

iShares S&P/TSX Global Gold Index is a hold.
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MARKET VECTORS VIETNAM ETF $17.317 (New York symbol VNM; buy or sell through brokers) holds Vietnamese companies or foreign firms that get a significant amount of their revenue from Vietnam.

The ETF’s top holdings are Vincom Corp. (real estate), 7.8%; Bank for Foreign Trade of Vietnam, 7.5%; Masan Group (a food, resources and banking conglomerate), 6.5%; Saigon Thuong Tin Commercial Bank, 6.3%; and Baoviet Holdings (insurance), 6.1%.

The ETF cuts risk by investing part of its assets in firms that are based outside of Vietnam but still do business there. That’s a better approach than adding thinly traded or illiquid shares of smaller Vietnamese firms.

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ISHARES MSCI CANADA INDEX FUND $24.49 (New York symbol EWC; buy or sell through brokers; ca.ishares.com) holds the stocks in the Morgan Stanley Capital International Canada Index. The fund has a 0.48% MER and yields 1.7%.

The index’s top holdings are Royal Bank, 7.7%; TD Bank, 7.1%; Valeant Pharmaceuticals, 5.6%; Bank of Nova Scotia, 4.9%; CN Railway, 4.4%; Suncor Energy, 3.7%; Bank of Montreal, 3.5%; Enbridge, 3.1%; and Manulife Financial, 3.0%. If you want to own a Canadian index fund, you should buy the iShares S&P/TSX 60 Index ETF (see previous page). You’ll pay about a third of the management fees.

We don’t recommend the iShares MSCI Canada Index Fund.

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