etf

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. That’s different from mutual funds, which you can only buy at the end of the day at a price that reflects the fund’s value at the close of trading. Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds....

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....

In 2011, gold shot up to a high of $1,950 U.S. an ounce, and silver reached a peak of $48.48. Gold prices then fell steadily, hitting a low of $1,085 in August 2015 for the first time since mid-2010. The metal now trades at $1,146. Silver also declined to a five-year low of $14.11 an ounce in August 2015. It now trades at $16.05. In the longer term, gold and silver could well regain their 2011 highs. This would simply reflect the vast inflationary expansion in the U.S. money supply since the 2008 financial crisis....

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%....

Our view on two international ETFs—one for Emerging Markets, one for South Korea—as a way to diversify your portfolio in today’s markets

BMO S&P/TSX Laddered Preferred Share Index ETF holds floating-rate preferred shares that fluctuate with changes in interest rates. Our view.

Brokers like theme investing because it gives them an opportunity to recommend new stocks or ETFs to their clients, which may not be beneficial to investors.

Many new ETFs have wide appeal and include a broad range of investment opportunities. They can also come with extra costs that investors should be aware of

ISHARES CANADIAN UNIVERSE BOND INDEX ETF $31.67 (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the Canadian Universe Bond Index. The 929 bonds in the portfolio have an average term to maturity of 10.34 years. The fund’s MER is 0.33%.

The bonds in the index are 71.3% government and 28.7% corporate.

The fund yields 2.8%, compared to the Short-Term Bond Fund’s 2.4%. Its yield to maturity is 1.93%, 0.85% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.

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ISHARES CANADIAN SHORT-TERM BOND INDEX ETF $28.69 (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short-Term Bond Index. This index consists of a range of investment-grade federal, provincial, municipal and corporate bonds with one- to five-year terms to maturity. The fund holds 430 bonds with an average term to maturity of 2.98 years. The bonds in the index are 64.8% government and 35.2% corporate. The fund’s MER is 0.28%.

The iShares Canadian Short-Term Bond Index Fund yields 2.4%, but this high yield is due to the fact that some of the fund’s bonds pay above-market interest rates. As a result, they trade above their face value. When these bonds mature, holders will only get the bonds’ face value, meaning the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.

The key figure when looking at the long-term return of this fund is yield to maturity. This yield takes into account the series of capital losses the fund will experience as its above-market-rate bonds mature. The iShares Canadian Short-Term Bond Index ETF’s yield to maturity is around 1.08%—less than the 2.4% yield but still higher than the 0.42% you’d earn by investing in, say, a one-year T-bill.

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