ishares
We think conservative investors could hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus. The best ETFs offer very low management fees and well-diversified, tax-efficient portfolios of high quality stocks. Here’s a look at six global ETFs:...
ISHARES AUSTRALIA INDEX FUND $23.48 (New York symbol EWA; buy or sell through brokers) is an ETF that holds the 79 largest Australian stocks. Its MER is 0.48%. The fund’s top holdings include Commonwealth Bank of Australia, 11.7%; Westpac Banking Corp., 9.1%; BHP Billiton, 8.5%; Australia and New Zealand Banking Group, 7.9%; National Australia Bank, 6.9%; Wesfarmers, 4.2%; CSL Ltd., 3.6%; Woolworths, 3.5%; Woodside Petroleum, 2.3%; Rio Tinto, 2.2%; Telstra Group, 2.2%, and Scentre Group, 1.7%; and Westfield Group, 1.5%. Australia benefits from its stable banking and political systems. It is also rich in natural resources and close to key Asian markets with vast potential, including India and China....
ISHARES DEX UNIVERSE BOND INDEX FUND $31.03 (Toronto symbol XBB; buy or sell through brokers) mirrors the performance of the DEX Universe Bond Index. The 833 bonds in the portfolio have an average term-to-maturity of 10.03 years. The fund’s MER is 0.33%.
The bonds in the index are 68.2% government and 31.8% corporate.
The fund yields 3.0%, compared to the Short-Term Bond Fund’s 2.5%. Its yield-to-maturity is 2.37%, 0.80% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
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The bonds in the index are 68.2% government and 31.8% corporate.
The fund yields 3.0%, compared to the Short-Term Bond Fund’s 2.5%. Its yield-to-maturity is 2.37%, 0.80% above the Short-Term Fund. That reflects the added risk of holding long-term bonds.
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ISHARES DEX SHORT-TERM BOND INDEX FUND $28.55 (Toronto symbol XSB; buy or sell through brokers) mirrors the performance of the DEX Short- Term Bond Index.
This index consists of a wide range of investmentgrade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 400 bonds with an average term to maturity of 2.86 years. The bonds in the index are 61.0% government and 39.0% corporate. The fund’s MER is 0.27%.
iShares DEX Short-Term Bond Index Fund yields 2.5%. However, 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, which means the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.
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This index consists of a wide range of investmentgrade federal, provincial, municipal and corporate bonds with between one- and five-year terms to maturity. The fund holds 400 bonds with an average term to maturity of 2.86 years. The bonds in the index are 61.0% government and 39.0% corporate. The fund’s MER is 0.27%.
iShares DEX Short-Term Bond Index Fund yields 2.5%. However, 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, which means the portfolio will incur predictable capital losses. These losses will offset some of the appeal of the above-market yields.
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ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $8.06 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index.
This index is made up of 40 gold stocks from Canada and around the world. The iShares S&P/TSX Global Gold Index Fund’s MER is 0.61%. It began trading on March 23, 2001.
The fund’s top holdings are Goldcorp at 16.2%; Barrick Gold, 14.7%; Newmont Mining, 9.9%; Franco Nevada, 7.8%; Randgold Resources (ADR), 5.7%; Agnico-Eagle Mines, 5.3%; Eldorado Gold, 4.2%; Royal Gold, 4.0%; Yamana Gold, 3.7%; and AngloGold Ashanti (ADR), 3.5%.
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This index is made up of 40 gold stocks from Canada and around the world. The iShares S&P/TSX Global Gold Index Fund’s MER is 0.61%. It began trading on March 23, 2001.
The fund’s top holdings are Goldcorp at 16.2%; Barrick Gold, 14.7%; Newmont Mining, 9.9%; Franco Nevada, 7.8%; Randgold Resources (ADR), 5.7%; Agnico-Eagle Mines, 5.3%; Eldorado Gold, 4.2%; Royal Gold, 4.0%; Yamana Gold, 3.7%; and AngloGold Ashanti (ADR), 3.5%.
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ISHARES MSCI JAPAN INDEX FUND $11.76 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an ETF that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index.
The fund has now regained all of the ground it lost in the recent market downturn. Its latest rise came after the Japanese government and the Bank of Japan announced huge increases in their economic stimulus programs.
Under Prime Minister Shinzo Abe’s so-called “Abenomics” strategy, the Bank of Japan has pumped money into the country’s economy. However, consumer spending has remained sluggish, especially after the government raised the sales tax to 8% from 5% on April 1, 2014.
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The fund has now regained all of the ground it lost in the recent market downturn. Its latest rise came after the Japanese government and the Bank of Japan announced huge increases in their economic stimulus programs.
Under Prime Minister Shinzo Abe’s so-called “Abenomics” strategy, the Bank of Japan has pumped money into the country’s economy. However, consumer spending has remained sluggish, especially after the government raised the sales tax to 8% from 5% on April 1, 2014.
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ISHARES MSCI JAPAN INDEX FUND $11.76 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an ETF that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index. The fund has now regained all of the ground it lost in the recent market downturn. Its latest rise came after the Japanese government and the Bank of Japan announced huge increases in their economic stimulus programs. Under Prime Minister Shinzo Abe’s so-called “Abenomics” strategy, the Bank of Japan has pumped money into the country’s economy. However, consumer spending has remained sluggish, especially after the government raised the sales tax to 8% from 5% on April 1, 2014....
In 2011, gold hit a high of $1,950 U.S. an ounce and silver hit a high of $48.48. But the price of gold has fallen since then and recently dropped below $1,200 for the first time since mid-2010. It now trades at $1,141. Silver has dropped, as well, and at $15.35 an ounce is also trading at lows not seen since mid-2010. Over the longer term, gold and silver could well regain their 2011 highs. This will simply reflect the vast expansion in the U.S. money supply that has taken place since the financial crisis struck in 2008....
Canada’s inflation rate is now at 2.0%, right at the Bank of Canada’s target. This should let the bank keep interest rates low, which holds down our dollar, making our exports cheaper in world markets. That’s good for Canada’s economic growth. Even so, the long-term outlook is for higher interest rates. That’s because heavy deficit spending and the expansion of the money supply in the past few years make higher inflation more likely. We continue to advise against investing in bonds right now. That’s because today’s low interest rates make bonds unattractive, and rising rates would push down their future value....
DIVIDEND INDEX FUND $25.38 (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 0.55%. It yields 3.8%.
The fund’s top holdings are CIBC, 7.4%; National Bank, 6.9%; TD Bank, 6.7%; Bank of Montreal, 6.0%; Bonterra Energy, 6.0%; Royal Bank, 5.3%; Bank of Nova Scotia, 4.6%; BCE, 4.1%; Trans- Canada, 3.9%; and Laurentian Bank, 3.8%.
The ETF holds 53.0% 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, 7.4%; National Bank, 6.9%; TD Bank, 6.7%; Bank of Montreal, 6.0%; Bonterra Energy, 6.0%; Royal Bank, 5.3%; Bank of Nova Scotia, 4.6%; BCE, 4.1%; Trans- Canada, 3.9%; and Laurentian Bank, 3.8%.
The ETF holds 53.0% 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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