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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

Preferred shares come with price volatility

Preferred shares are equities that pay fixed dividends without offering investors voting rights. Still, those payments are made before dividends to common shareholders.

While investors are attracted to “preferreds” for income, those shares are sensitive to the movement of interest rates and their prices can be volatile....

2 min read

Pat McKeough

ETFs

Industry leaders remain profitable in South Africa

Africa’s fifth largest nation by population, South Africa is the continent’s third biggest economy by gross domestic product. But weak commodity prices have slowed its economic growth and the controversial leadership of former president Jacob Zuma has zapped business confidence....

3 min read

Pat McKeough

ETFs

This telecom giant is primed for growth

AT&T INC. $37 (New York symbol T) is the largest U.S. wireless carrier, with 142 million subscribers. It also offers landline and satellite TV.

In the latest quarter, earnings jumped to $19.0 billion, or $3.08 a share, from $2.4 billion, or $0.39, a year earlier....

1 min read

Pat McKeough

ETFs

Telecommunications: slow but profitable growth

Telecommunications form an integral part of the economic infrastructure. Strict licensing standards and high capital requirements result in considerable barriers to entry. Despite slow growth, many of the major telecommunication companies (see AT&T box this page) have strong cash flow, attractive p/e’s and rising dividends....

2 min read

Pat McKeough

ETFs

These ETFs aim to rise with world markets

Almost half of the world’s stocks trade on exchanges outside of North America, where the economic and political climate can increase risk. However, even in developed countries with stable markets, price-to-earnings ratios are generally more attractive than they are in the U.S....

3 min read

Pat McKeough

ETFs

Pass on this ETF

FIRST ASSET ACTIVE CANADIAN DIVIDEND ETF $9.40 (Toronto symbol FDV; TSINetwork ETF Rating: Aggressive; Market cap: $32.1 million) aims to invest in Canadian dividend payers with the potential for capital gains. Its own dividend yield is a high 4.0%.

The ETF takes an active management approach: it relies on difficult-to-read market trends to pinpoint the economic sectors most likely to see significant growth; it then applies its own evaluative formula to companies in order to decide on the fund’s holdings.

The result is Energy comprises 27% of assets, followed by Financials (19%), Real Estate (15%) and Industrials (10%).

The fund has 46 stocks....

1 min read

Pat McKeough

ETFs

International ETFs see rapid expansion of assets

At the end of 2017, the holdings of globally invested exchange traded funds equalled $4.8 trillion U.S. That represents a 36% increase over 2016.

The number of funds also increased, rising 7.4% to reach 4,835. Over the past 5 years, the assets of ETFs listed globally increased by 148%.

In a business where fund size improves liquidity and appeal, leading ETF providers continue to focus on expanding their inflows.

The top 10 funds collected $63 billion in January 2018....

1 min read

Pat McKeough

ETFs

These ETFs tap strong U.S. housing

The U.S. housing market has largely recovered from the 2008/2009 housing crisis. Still, rising interest rates may eventually slow the speed of future growth. In the near term, however, higher employment levels, rising wages and limited housing supply should continue to spur demand for new homes....

2 min read

Pat McKeough

ETFs

Best way to buy Vietnam

VANECK VECTORS VIETNAM ETF $18.68 (New York symbol VNM; buy or sell through brokers) holds Vietnamese companies and foreign firms that get a significant share of their revenue from the Southeast Asian nation.

The ETF’s top holdings are Vingroup (conglomerate), 8.0%; No Va Land Investment Group (real estate), 7.3%; Vietnam Dairy Products, 7.1%; FLC Faros Construction, 6.9%; and Bank For Foreign Trade of Vietnam, 6.5%.

Investing in Vietnam still comes with aboveaverage political risk....

1 min read

Pat McKeough

ETFs

Five of these North American ETFs are buys

The six ETFs we update below mainly hold high-quality stocks that are widely traded on Canadian and U.S. ex- changes. Each fund tracks the performance of a major stock market index. That’s different from ETFs focused on narrower indexes or themes such as solar power and bio- technology.

Of course, you pay brokerage commissions to buy and sell these investments....

4 min read

Pat McKeough

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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.