etf
An ETF (Exchange-Traded Fund) is an investment fund that holds a collection of underlying assets, such as stocks or bonds, in a single pooled vehicle. ETFs allow investors to purchase a variety of different securities at once, providing greater diversification compared to owning individual assets. They are traded on stock exchanges like regular stocks, allowing for intraday trading at market prices. ETFs typically have lower fees than mutual funds and often passively track an index or sector, making them a popular choice for investors seeking a cost-effective way to invest in a diversified portfolio.
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iShares U.S. Small Cap Index ETF (CAD-Hedged), $27.33, symbol XSU on Toronto (Units outstanding: 6.1 million; Market cap: $166.7 million; www.blackrock.com), aims to track the Russell 2000 Index (hedged against the Canadian dollar). The fund’s MER is 0.36%. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index (which measures the performance of the 3,000 largest U.S. firms based on total market capitalization, or “market cap”; these 3,000 represent around 98% of the U.S. equity market). In all, the Russell 2000 represents around 10% of the Russell 3000’s total market cap. The Russell 2000’s average market cap is about $1.3 billion, while the median market cap is about $528 million. The largest company in the index has a market cap of roughly $5.0 billion....
POWERSHARES QQQ ETF $105.60 (Nasdaq symbol QQQ; buy or sell t h r o u g h b r o k e r s ; www.invescopowershares.com), formerly called Nasdaq 100 Trust Shares, holds stocks that represent the Nasdaq 100 Index, which consists of the 100 largest shares on the Nasdaq exchange, based on market cap.
The Nasdaq 100 Index contains shares of companies in a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial companies. The fund’s expenses are about 0.20% of its assets.
The index’s highest-weighted stocks are Apple, Microsoft, Amgen, Google, Cisco Systems, Intel Corp., Amazon.com, Gilead Sciences, Comcast and Facebook.
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The Nasdaq 100 Index contains shares of companies in a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial companies. The fund’s expenses are about 0.20% of its assets.
The index’s highest-weighted stocks are Apple, Microsoft, Amgen, Google, Cisco Systems, Intel Corp., Amazon.com, Gilead Sciences, Comcast and Facebook.
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SPDR S&P 500 ETF $206.43 (New York symbol SPY; buy or sell through brokers; www.spdrs.com) holds the stocks in the S&P 500 Index, which consists of 500 major U.S. companies that are chosen based on their market cap, liquidity and industry group.
The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, Pfizer, General Electric, Berkshire Hathaway and Wells Fargo & Co. The fund’s expenses are just 0.10% of its assets.
If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.
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The index’s highest-weighted stocks are Apple, ExxonMobil, Microsoft, Procter & Gamble, Johnson & Johnson, J.P. Morgan Chase, Pfizer, General Electric, Berkshire Hathaway and Wells Fargo & Co. The fund’s expenses are just 0.10% of its assets.
If you want exposure to the S&P 500 Index, the SPDR S&P 500 ETF is a buy.
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ISHARES CANADIAN SELECT DIVIDEND INDEX ETF $23.80 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highestyielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of the ETF’s assets. The fund’s MER is 0.55%, and it yields 4.2%.
The fund’s top holdings are CIBC, 8.4%; Bank of Montreal, 6.3%; Royal Bank, 6.1%; Bank of Nova Scotia, 5.3%; BCE, 5.1%; IGM Financial, 4.7%; Ag Growth International, 4.4%; Laurentian Bank of Canada, 4.3%; TransCanada Corp., 4.2%; and TD Bank, 4.0%.
The ETF holds 53.5% 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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The fund’s top holdings are CIBC, 8.4%; Bank of Montreal, 6.3%; Royal Bank, 6.1%; Bank of Nova Scotia, 5.3%; BCE, 5.1%; IGM Financial, 4.7%; Ag Growth International, 4.4%; Laurentian Bank of Canada, 4.3%; TransCanada Corp., 4.2%; and TD Bank, 4.0%.
The ETF holds 53.5% 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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ISHARES S&P/TSX 60 INDEX ETF $21.90 (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, 7.8%; TD Bank, 7.1%; Valeant Pharmaceuticals, 5.6%; Bank of Nova Scotia, 5.4%; CN Railway, 4.8%; Suncor Energy, 3.6%; Enbridge, 3.6%; Bank of Montreal, 3.5%; BCE, 3.2%; Manulife Financial, 3.1%; Canadian Natural Resources, 2.9%; Trans- Canada Corp., 2.8%; Brookfield Asset Management, 2.7%; CIBC, 2.6%; and CP Rail, 2.5%.
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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, 7.8%; TD Bank, 7.1%; Valeant Pharmaceuticals, 5.6%; Bank of Nova Scotia, 5.4%; CN Railway, 4.8%; Suncor Energy, 3.6%; Enbridge, 3.6%; Bank of Montreal, 3.5%; BCE, 3.2%; Manulife Financial, 3.1%; Canadian Natural Resources, 2.9%; Trans- Canada Corp., 2.8%; Brookfield Asset Management, 2.7%; CIBC, 2.6%; and CP Rail, 2.5%.
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PowerShares WilderHill Clean Energy Portfolio ETF, $5.75, symbol PBW on New York (Units outstanding: 25.0 million; Market cap: $143.8 million; www.invesco.com), aims to replicate the performance of the WilderHill Clean Energy Index, which is made up of 53 companies that focus on renewable power, energy conservation or efficiency. The fund’s top holdings are Hanwah Q Cells Co. (ADR), TerraForm Power, Renewable Energy Group, Ormat Technologies, Pattern Energy Group, China Ming Yang Wind Power Group (ADR), Solazyme Inc., Enphase Energy, Air Products and Chemicals, and PowerSecure International. This ETF takes on a lot of risk with its holdings, which include a number of Chinese stocks and companies that are heavily dependent on government subsidies....
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 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....
Most investors would agree when I say that Exchange-Traded Funds (ETFs) started out as the most benign investment innovation that has come along in our lifetimes.
However, as often happens after the successful launch of any new investment product, the financial industry soon came up with new, improved ETFs. The new models came with a wider variety of investor appeal, along with new wrinkles and extra costs.
The first ETFs had a simple goal: cutting fees for investors. Each new ETF aimed to copy the performance of a particular stock index (minus the costs of creating and running the ETF, of course). Most of the model indices were well-known, widely followed collections of actively traded stocks.
These days, new ETFs aim to broaden investment opportunities for investors, and create new profit opportunities for the financial companies that sponsor them.
Instead of giving you a low-cost way to copy the results of a standard market index, new ETFs aim to mimic much narrower indices and higher-risk strategies. They may give you a way to invest in a particular foreign stock market—coupled, in many cases, with an arrangement that hedges against movements in the foreign currency in which that foreign market carries on its trading. Or they may give you a way to participate in a particular stock-market strategy.
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However, as often happens after the successful launch of any new investment product, the financial industry soon came up with new, improved ETFs. The new models came with a wider variety of investor appeal, along with new wrinkles and extra costs.
The first ETFs had a simple goal: cutting fees for investors. Each new ETF aimed to copy the performance of a particular stock index (minus the costs of creating and running the ETF, of course). Most of the model indices were well-known, widely followed collections of actively traded stocks.
These days, new ETFs aim to broaden investment opportunities for investors, and create new profit opportunities for the financial companies that sponsor them.
Instead of giving you a low-cost way to copy the results of a standard market index, new ETFs aim to mimic much narrower indices and higher-risk strategies. They may give you a way to invest in a particular foreign stock market—coupled, in many cases, with an arrangement that hedges against movements in the foreign currency in which that foreign market carries on its trading. Or they may give you a way to participate in a particular stock-market strategy.
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Market Vectors Agribusiness ETF, $54.21, symbol MOO on New York (Units outstanding: 26.1 million; Market cap: $1.4 billion; www.vaneck.com), aims to track the Market Vectors Global Agribusiness Index, after expenses. This index includes shares of agricultural firms from around the world. To be included, a company must be publicly traded, have a market cap over $150 million U.S. and meet certain minimum trading volumes. The index contains five major subsectors: agriculture chemicals and fertilizers, agricultural products, agricultural equipment, livestock operations, and biofuels (including ethanol and biodiesel). The geographic breakdown of stocks in the Market Vectors Global Agribusiness Index is as follows: the U.S. (48.9%), Canada (11.0%), Switzerland (8.1%), Japan (6.4%), Singapore (4.1%), Norway (3.8%), the Netherlands (3.1%), Malaysia (3.0%), China (1.9%), Australia (1.9%) and other countries (7.8%)....
vGLOBAL X COPPER MINERS ETF $6.99 (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 41.0% of the ETF’s holdings. It also includes companies based in Australia (15.5%), China (5.4%), Peru (5.0%) and Mexico (4.6%). The fund’s MER is 0.65%.
Its top holdings are Hudbay Minerals at 6.4%; Imperial Metals, 6.4%; Antofagasta plc, 5.8%; Teck Resources, 5.6%; Southern Copper, 5.6%; Jiangxi Copper, 5.5%; Lundin Mining, 5.2%; Kazakhmys, 5.2%; Turquoise Hill, 5.1%; Grupo Mexico, 5.0%; and Glencore International, 4.8%.
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Canadian firms make up 41.0% of the ETF’s holdings. It also includes companies based in Australia (15.5%), China (5.4%), Peru (5.0%) and Mexico (4.6%). The fund’s MER is 0.65%.
Its top holdings are Hudbay Minerals at 6.4%; Imperial Metals, 6.4%; Antofagasta plc, 5.8%; Teck Resources, 5.6%; Southern Copper, 5.6%; Jiangxi Copper, 5.5%; Lundin Mining, 5.2%; Kazakhmys, 5.2%; Turquoise Hill, 5.1%; Grupo Mexico, 5.0%; and Glencore International, 4.8%.
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