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ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Exchange traded funds trade on stock exchanges, just like stocks. Investors can buy them on margin, or sell them short. The best exchange-traded funds offer well-diversified, tax-efficient portfolios with exceptionally low management ETF fees. They are also very liquid.

Investors use ETFs in a variety of ways, and some investors work only with ETFs and no other type of investment in portfolio creation.

An amazing aspect of ETFs is their diversity. Some investors may create an entire portfolio solely from a few well-diversified ETFs.

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.

As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital gains taxes generated by the yearly distributions most conventional mutual funds pay out to unitholders.

ETFs have a place in every investor’s portfolio, at TSI Network we also recommend using our three-part Successful Investor strategy:

Invest mainly in well-established companies;
Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
Downplay or avoid stocks in the broker/media limelight.

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ETFs Library Archives

ETFs

Pass on this ETF

1 min read

Pat McKeough

ETFs

Emerging markets drive their gains

2 min read

Pat McKeough

ETFs

Tap into the best REITs

ISHARES S&P/TSX REIT INDEX ETF $18.80 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds all 19 Canadian real estate investment trusts in the S&P/TSX REIT Index. The fund has an MER of 0.61%, and it currently yields a high 4.4%.

The ETF’s top holdings are RioCan REIT (14.1%), Canadian Apart....

1 min read

Pat McKeough

ETFs

U.S. tariffs help this ETF

INVESCO CHINA SMALL CAP PORTFOLIO ETF $24.01 (New York Exchange symbol HAO; buy or sell through brokers; www.invesco.com) aims to track the AlphaShares China Small Cap Index. It’s made up of the 305 Chinese stocks that foreign investors are allowed to hold and that have market caps of less than $1.5 billion....

1 min read

Pat McKeough

ETFs

Here’s low-fee ways to invest internationally

Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. In all, it administers over $5.3 trillion U.S., spread across 415 mutual funds and ETFs.

Generally speaking, Canadians are blocked from buying mutual funds that are registered in the U.S....

2 min read

Pat McKeough

ETFs

Alberta’s production cuts did their job

Late last year Alberta’s previous NDP government ordered oil producers in the province to cut their total daily output.

The government-imposed reduction was the result of a lack of pipeline capacity that led to a glut of stored crude in the province and helped to push down the price for Western Canadian oil....

5 min read

Pat McKeough

ETFs

Strong U.S. economy boosts its banks

A strong U.S. economy and higher interest rates are normally good for the profitability of big banks. The recent sharp declines in U.S. long-term interest rates and the expectations for fewer, if any, rate hikes by the U.S. Federal Reserve this year resulted in a sharp sell-off of U.S....

3 min read

Pat McKeough

ETFs

Commodities play a key role in your portfolio

Commodities are the raw materials that production and manufacturing rely on. Investing in them can help investors diversify their portfolios and win greater protection from inflation.

However, commodities as a group have been out of favour for almost a decade and investors would rightly question the wisdom of either directly holding commodities or commodity producers in their portfolios.

A decade of underperformance

To consider the performance of physical commodities as a group, we selected the Dow Jones Commodity Index....

2 min read

Pat McKeough

ETFs

ETF Performances for April

With the political debate in the U.S. heating up, politicians have taken a renewed interest in the cost and availability of healthcare products and services. This had a negative impact on the performance of healthcare stocks in April. The iShares US Medical Device ETF (New York symbol IHI) lost 3.9% during the month while the Vanguard Healthcare ETF (New York symbol VHT) lost 3.0%.

This happened against the backdrop of a very positive month for equities around the world....

1 min read

Pat McKeough

ETFs

These new ETFs target trend investors

The North American ETF universe has welcomed several new theme ETFs in recent weeks—each is meant to tap an investment trends. Those funds include a new U.S. marijuana ETF as well as a fund focused on companies at the forefront of the developing 5G network industry.

ADVISORSHARES PURE CANNABIS ETF $25.00 (New York symbol YOLO) launched in April 2019 and is a second U.S....

1 min read

Pat McKeough

Testimonials

The cornerstones of Pat’s strategy–value, diversification and timelines–make his newsletter, The Successful Investor, highly profitable while minimizing risk. His advice is no-nonsense, down-to-earth and based on solid research. You’ll know what to invest in and what to avoid.

Chuck Chakrapani, PhD
Investors Association of Canada
The older I get the better dividends look. For retirees and would-be retirees who want to sleep at night, I can’t think of a better source of information on reliable growing dividend income than Pat McKeough’s newsletter, Dividend Advisor.

Jonathan Chevreau
Financial Post Columnist
As a manager of more than $500 million in mutual funds, I have access to the best brokerage research available in this country. But I still take time to read Pat McKeough’s premium newsletters

John Sartz
I appreciate the 25 years of above market returns I received by following your advice. at least 95% of my investment decisions were based on TSI recommendations.

Chuck J.
Subscriber since 1996. Inner Circle Member Since 2006
The newsletters I receive in Inner Circle Pro are fantastic! I have been following Pat’s advice for years and everything he has said has been amazing. His commentaries are brilliant, insightful, educational, rational and balanced. My returns are almost double the TSE and I have referred many of my friends who have switched over to your services.

Walter H.
Inner Circle Pro subscriber

Browse Premium Topics

Cannabis

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.