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:

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

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ETFs Library Archives
ETFs
ETF Performance Highlights
The runaway ETF winners in the month of September 2018 were marijuana funds ETFMG Alternative Harvest ETF (MJ) and Horizons Marijuana Life Sciences Index ETF (HMMJ). They gained 23.1% and 20.4%, respectively. The increases for these spectaculative stocks came on top of previous gains....
1 min read
Pat McKeough
ETFs
Two ETFs: Two different themes
This month we look at an ETF that aims to track the newly reclassified S&P/MSCI “communication services” sector. The other seeks to find dividend-paying stocks that will thrive in a rising interest-rate environment.


COMMUNICATION SERVICES SELECT SECTOR SPDR ETF $46.30 (New York symbol XLC) tracks the newly reclassified “communication services” sector: In its three-month lifespan, the ETF has already attracted $2.6 billion in assets under management.


On September 28, 2018, index creators S&P and MSCI announced their new industry group reclassifications.


In short, the telecommunication services sector expands and is now called the communication services sector....
2 min read
Pat McKeough
ETFs
How the trade pact works for Mexico
NAFTA has provided strong economic stimulus for Mexico since its implementation in 1994. It was, therefore, essential for the Mexican government to conclude negotiations on a revised agreement as soon as possible. Some of the key terms of the new USMCA deal follow:


1) The new deal requires 75% of the value of a vehicle made in North America for the North American market to be produced within the borders of the trading partners....
1 min read
Pat McKeough
ETFs
New trade agreement spurs Mexico’s outlook
The successful conclusion of NAFTA renegotiations—and the creation of the new United States-Mexico-Canada Agreement, or USMCA—should boost Mexico’s economic prospects. Combined with lower inflation and a boost to exports from a lower peso, the economy and stock market could be headed for better times.


Here is an ETF that provides exposure to the top Mexican publicly listed companies.


ISHARES MSCI MEXICO ETF $48.89 (Nasdaq symbol EWW; TSI Network ETF Rating: Aggressive; Market cap: $1.1 billion) tracks the performance of the largest publicly listed Mexican companies.


Financial Services account for 17% of its assets, while Telecommunication services (15%), Basic materials (15%), Consumer cyclical (14%), Industrials (11%) and Consumer defensive (10%) are other key segments.


The ETF holds a portfolio of 57 stocks; the top 10 holdings make up a high 62% of its assets....
4 min read
Pat McKeough
ETFs
The Equifax hack…one year later
Equifax (New York symbol EFX) is a leading consumer credit reporting agency. It collects information on over 800 million consumers and more than 88 million businesses worldwide. It also provides database management, fraud detection, business credit and analytical services.


On September 7, 2017, Equifax reported a major cybersecurity incident, affecting 143 million consumers in the U.S....
1 min read
Pat McKeough
ETFs
Profit from cybersecurity with these ETFs
Cybercrime can have disastrous consequences for individuals, corporations and governments alike—the 2017 hacking of Equifax provides a good example (see box on page 104). As a result, the multi-billion-dollar cyber-security industry is growing quickly as hackers and organized cybercriminals become ever more sophisticated.


Here are three ETFs that aim to benefit from the expanding number of businesses, organizations and individuals looking for cybersecurity products and services (see the supplement on page 110 for more information).


FIRST TRUST NASDAQ CYBERSECURITY ETF $25.71 (Nasdaq symbol CIBR; TSINetwork ETF Rating: Aggressive; Market cap: $787 million) invests in companies that serve the cybersecurity industry....
4 min read
Pat McKeough
ETFs
Canadian ETF growth maintains its pace
Canadian ETF assets are still growing. At the end of August 2018, there were 621 ETFs in Canada, with assets under management of $163.7 billion. Total assets were 22% higher than a year earlier. They were almost double the total asset value recorded at the end of 2015.


Blackrock Canada remains the largest ETF provider with 115 funds and a 37% market share....
1 min read
Pat McKeough
ETFs
Pass on this ETF
GLOBAL X SUPERDIVIDEND ETF $19.63 (New York symbol SDIV; TSINetwork ETF Rating: Aggressive; Market cap: $966.8 million) invests in 100 of the highest-yielding stocks worldwide. Stocks in the portfolio are equally weighted to reduce the risk associated with a high exposure to individual companies....
1 min read
Pat McKeough
ETFs
Hold the top North American REITs
The best real estate investment trusts (REITs) have good management and balance sheets strong enough to weather an economic downturn. They also have high-quality tenants. The best ones still do well despite economic slowdowns, and they have also taken advantage of low interest rates to refinance long-term mortgages on favourable terms.


Here are two ETFs focused on REITs: One invests in Canada; the other in the U.S....
3 min read
Pat McKeough
ETFs
Six North American ETFs: 5 buys, 1 sell
The six ETFs we update below mainly hold high-quality stocks that are widely traded on Canadian and U.S. exchanges. Each fund tracks the performance of a major stock market index. That’s different from ETFs focused on narrower indexes or themes such as cryptocurrencies or biotechnology.


Of course, you pay brokerage commissions to buy and sell these investments....
4 min read
Pat McKeough
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