etf

VANGUARD EMERGING MARKETS ETF $38.53 (New York symbol VWO; buy or sell through brokers) aims to track the MSCI Emerging Markets Index, which is made up of common stocks of companies located in emerging markets around the world. The fund has an MER of 0.27%. The funds’s top holdings are China Mobile (China: wireless), Gazprom (Russia: gas utility), Samsung Electronics (South Korea: electronics), Teva Pharmaceutical Industries, America Movil SA de CV (Latin America: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), China Construction Bank, China Life Insurance Co. and Industrial and Commercial Bank of China. The $22.1-billion Vanguard Emerging Markets ETF’s largest holdings by country are: China (18.4%), Brazil (14.8%), South Korea (13.5%), Taiwan (11.2%), South Africa (7.6%), India (7.5%), Russia (6.1%), Mexico (4.6%), Israel (3.0%), Malaysia (2.9%), Indonesia (1.9%), Turkey (1.7%), Chile (1.4%), Thailand (1.4%), Poland (1.3%), Czech Republic (0.6%), Hungary (0.6%), Philippines (0.5%), Peru (0.4%), Egypt (0.3%), Cayman Islands (0.1%) and Colombia (0.1%)....

Pennsylvania-based Vanguard Group is one of the world’s largest investment-management companies. It manages over $1 trillion U.S. in 150 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 (ETFs) that are listed on U.S. stock exchanges. We don’t recommend all of the Vanguard index funds, but here are two that we do see as low-fee buys:...

U.S.-based ProShares offers a range of short-selling products for U.S. stock indexes. It also sells products that take long positions. ProShares offers three types of exchange-traded funds (ETFs). All have MERs of 0.95%. 1) ProShares Short ETFs are designed to move in the opposite direction of the underlying index....

Claymore 1-5 Yr Laddered Corporate Bond ETF (exchange-traded fund), $20.78, symbol CBO on Toronto (Shares outstanding: 8.8 million; Market cap: $182.9 million), invests in a portfolio of short-term bonds drawn from the DEX (formerly Scotia Capital) Bond Index. The ETF is a recent new issue that first sold units to the public at $20 each, and began trading on Toronto on February 25, 2009. It has a 0.25% annual management fee and pays a $0.0715 quarterly distribution, which yields 1.4% on a yearly basis. The fund’s 25 holdings are divided into five staggered, or “laddered,” equally weighted maturities that range from one to five years. Each maturity includes five or more bonds with a minimum credit rating of “A”. Each year, the longest-term bonds will reach maturity, and the shorter-term bonds will be a year older. The fund can use proceeds of the matured bonds to buy new bonds that restore the desired portfolio balance....

Horizons BetaPro NYMEX Crude Oil Bull Plus ETF, $10.20, symbol HOU on Toronto (Shares outstanding: 41.5 million; Market cap: $423.2 million), is an ETF that aims to provide daily investment performance that is double that of the NYMEX crude oil index. It uses options in a way that aims for it to go up twice as much in a day as the underlying index. If the index falls, the ETF will drop by around twice as much. The key point here, however, is that this investment works best if you only hold it for a single day when the price of the underlying index is going up. Otherwise, the costs of using options eat into the value of the ETF. This ETF started trading at around $100 in early 2008. It moved up to $240 by mid-July. By year-end, the price of oil was down below $40, but the ETF was down near $10. You might say the ETF “outperformed oil on the downside” – that it, it fell much faster than oil. That’s because its value was suffering due to the falling price of oil and due to the costs of dealing in options....

Theme funds are funds that focus on investments in broad areas, such as alternative energy, health, science, resources or whatever. These funds often suffer from pseudo-diversification. That is, they have lots of different stocks in their portfolios, but these stocks all respond to the same economic factors. What’s more, many theme-fund managers gravitate toward speculative stocks and recent new issues, two areas that harbour more than their share of disasters. That’s especially so when the theme comes out in response to a boom in the theme where it wishes to invest. Of course, theme funds can prosper for months or years. But they rarely generate enough profit to justify their underlying risk. We don’t recommend any of the four alternative-energy funds we analyze below....

Exchange Traded Funds, or ETFs, don’t load you up with heavy management fees, nor do they tie you down with heavy redemption charges if you decide to get out before six years have passed. Instead, they give you a lower-cost and more flexible and convenient alternative to mutual funds.

The problem is that ETFs are just as helpful for facilitating smart moves as they are for dumb ones. And there are all sorts of dumb moves that ETFs can facilitate.

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 are chosen to represent the holdings that go into the calculation of the index or sub-index.

This way, if you get an urge to invest in oil stocks, or gold stocks, or Swedish stocks, or wind-power stocks, or any of hundreds of other stock groups, you can act on that urge without doing any messy and time-consuming research on individual stocks.

In fact, since ETFs also trade on stock exchanges, you can buy or sell them any time the exchange is open. With conventional mutual funds, you can only buy or sell at the end of the day, at a price that reflects the value of the fund’s holdings at the close of trading.

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Generally speaking, Canadians can’t buy units of mutual funds registered in the U.S., because they aren’t registered with provincial securities commissions for sale in Canada. For that matter, some Canadian funds are not available in all provinces. Canadians can’t buy Vanguard index mutual funds. They can, however, buy Vanguard ETFs listed on stock exchanges. Vanguard Dividend Appreciation ETF, $39.29, symbol VIG on New York, tracks an index of about 200 stocks screened for a history of rising dividends. The top holdings are currently Wal-Mart Stores, International Business Machines, The Coca-Cola Co., PepsiCo, Chevron Corp., Johnson & Johnson, McDonald’s Corp., Abbott Laboratories, ExxonMobil and Procter & Gamble. Vanguard Dividend Appreciation ETF’s MER is 0.28%, and it has a dividend yield of 2.8%. Vanguard Dividend Appreciation ETF is okay to hold....

The Claymore BRIC exchange-traded fund (ETF), $18.95, symbol CBQ on Toronto (Shares outstanding: 5.1 million; Market cap: $95.8 million), invests in the BNY (Bank of New York) BRIC Select ADR Index. This index tracks the performance of companies from the so-called “BRIC” countries: Brazil, Russia, India and China. These companies trade on U.S. stock exchanges as American or global depositary receipts. The Claymore BRIC ETF hedges its exposure to U.S. dollars in order to lower the impact of fluctuations in foreign-exchange rates. The fund selects companies using a system, developed by the Bank of New York, that is based on several criteria, including liquidity, share price and market capitalization. There are currently about 75 securities in the fund’s portfolio. Its managers seek to hold the largest-capitalization stocks in the volatile markets in which it invests. The Claymore BRIC ETF was launched in September 2006, at an initial price of $20 per unit. It has an expense ratio of 0.60%. However, trading and hedging expenses add to that figure....

Claymore 1‐5 Yr Laddered Corporate Bond ETF, $20.31, symbol CBO on Toronto (Shares outstanding: 400,000; Market cap: $8.1 million), invests in a portfolio of short-term bonds drawn from the DEX (formerly Scotia Capital) Bond Index. The ETF is a recent new issue which first sold units to the public at $20 each, and began trading on Toronto on February 25, 2009. It has a 0.75% annual management fee and pays a $0.0715 quarterly distribution, which yields 1.6% on a yearly basis. The fund’s 25 holdings are divided into five staggered, or “laddered,” equally weighted maturities that range from one to five years. Each maturity includes five or more bonds with a minimum credit rating of “A”. Each year, the longest-term bonds will reach maturity, and the shorter-term bonds will be a year older. The fund can use proceeds of the matured bonds to buy new bonds that restore the desired portfolio balance....