etf

Exchange-traded funds (ETFs) offer very low management fees. As well, the best ETFs offer well-diversified, tax-efficient portfolios of high-quality stocks. We think conservative investors could hold up to, say, 10% of their portfolios in foreign stocks. You need to be highly selective with your ETF selections, but they’re a great way to hold those stocks. Here are six foreign ETFs we like:...

ISHARES AUSTRALIA INDEX FUND $23.75 (New York symbol EWA; buy or sell through brokers), is an ETF that holds the 73 largest Australian stocks. Its MER is 0.52%. The fund’s top holdings include BHP Billiton, 13.7%; Commonwealth Bank of Australia, 9.2%; Westpac Banking Corp., 7.5%; Australia and New Zealand Banking Group, 6.9%; National Australia Bank, 6.1%; Woolworths, 3.6%; Rio Tinto, 3.5%; Wesfarmers, 3.5%; Newcrest Mining, 3.0%; and Woodside Petroleum, 2.8%. Australia benefits from its stable banking and political systems. It is also rich in natural resources, and its exports are in high demand in Asian markets, including India and China....

POWERSHARES QQQ ETF $61.02 (Nasdaq symbol QQQQ; buy or sell through brokers; www.invescopowershares.com), formerly called Nasdaq 100 Trust Shares, holds the stocks that represent the Nasdaq 100 Index. That index is made up 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, Qualcomm, Google, Cisco Systems, Intel, Amazon.com, Oracle Corp., Comcast Corp. and Amgen Inc.

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SPDR DOW JONES INDUSTRIAL AVERAGE ETF $126.91 (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 Corp., 3M, Johnson & Johnson, McDonald’s Corp., Coca-Cola Co., Caterpillar Inc., United Technologies and Boeing Inc. The fund’s expenses are about 0.18% of its assets.

SPDR Dow Jones ETF is a buy.

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SPDR S&P 500 ETF $132.47 (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. stocks that are chosen based on their market cap, liquidity and industry group.

The index’s highest-weighted stocks are Apple Inc. ExxonMobil, Microsoft, Procter & Gamble, Wells Fargo & Co., Johnson & Johnson, IBM, Chevron, General Electric, Pfizer Inc., Coca-Cola Co. and AT&T.

The fund’s expenses are just 0.10% of its assets.

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ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $21.01 (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 3.9%.

The fund’s top holdings are CIBC, 6.6%; National Bank, 5.9%; Bonterra Energy, 5.8%; Bank of Montreal, 5.3%; TD Bank, 5.3%; AG Growth International, 4.7%; Royal Bank of Canada, 4.3%; Telus, 4.1%; and Bank of Nova Scotia, 4.1%.

The fund holds 54.3% of its assets in financial stocks. Utilities are next, at 20.5%. 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 CDN REIT SECTOR INDEX FUND $15.72 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 13 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of the ETF’s value.

iShares CDN REIT’s expenses are just 0.55% of its assets. The fund yields 4.7%.

As mentioned, RioCan REIT is the fund’s largest holding, at 23.9%, followed by H&R REIT (13.1%), Canadian REIT (8.5%), Calloway REIT (8.2%), Dundee REIT (7.0%), Boardwalk REIT (6.9%), Canadian Apartment Properties REIT (6.5%), Primaris Retail REIT (5.8%), Allied Properties REIT (4.4%), Cominar REIT (4.4%), Chartwell Seniors Housing REIT (4.3%), Artis REIT (4.3%) and Extendicare REIT (2.3%).

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As part of our three-part Successful Investor portfolio management philosophy, we advise you to downplay or avoid stocks that are in the broker/media limelight. That’s because this limelight raises investor expectations. When limelight stocks fail to live up to these heightened expectations, and that often happens, downturns can be brutal. Similar advice applies to types of investments, such as exchange traded funds (ETFs). These investment innovations are in the broker/media limelight right now for all the usual reasons. From the media point of view, ETFs come with a good story: you can save money because they come with much lower fees than conventional mutual funds, plus there’s news to report, since new ETFs are coming out all the time....

Our view is that virtually all Canadian investors should have 20% to 30% of their portfolios in U.S. stocks, like the ones we recommend in Wall Street Stock Forecaster. We feel now is a good time to hold high-quality U.S. stocks, and we see U.S. dollar exposure as a plus—a valuable form of diversification. Another option is to add some foreign exchange traded funds (ETFs), such as those we recommend in Canadian Wealth Advisor, to your portfolio in reasonable quantities, perhaps 10% of your holdings if you are a conservative investor (including 5% or so in higher-risk funds, such as emerging market ETFs)....

You may find that exchange-traded funds (ETFs) have a place in your portfolio. Unlike many other financial innovations, they don’t load you up with heavy management fees or tie you down with high redemption charges if you decide to withdraw. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. They have another advantage. Since shares are only added or removed when the underlying index changes, there’s a low turnover. That means you aren’t faced with the capital gains bills generated by the yearly distributions most mutual funds pay out to their unitholders....