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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

Cut emerging-market risk with ETFs

Many investors resist holding emerging-market stocks. They are concerned about weaker levels of regulatory oversight, weak corporate governance, market volatility, and political and currency risks.

However, emerging-market economies continue to expand faster than those of the developed world....

1 min read

Pat McKeough

ETFs

Top emerging markets continue their surge

After almost a decade of modest gains, emerging markets enjoyed a significant boost in 2017. Growth prospects for those developing nations are now much stronger than those for most developed markets. Even so, company share prices remain attractive.

VANGUARD FTSE EMERGING MARKETS ALL CAP INDEX ETF $36 (Toronto symbol VEE; TSINetwork ETF Rating: Aggressive, Market cap: $775.7 million) provides broad exposure to companies in emerging markets.

The largest country holdings are in China (26%), Taiwan (14%), India (11%), Brazil (8%) and South Africa (7%)....

2 min read

Pat McKeough

ETFs

Economic reforms bolster this Indian ETF

India continues its impressive expansion, and remains one of the world’s top ten fastest growing economies.

The country’s major structural reforms, such as the introduction of a nationwide goods and services tax and better funding for state-owned banks, should further speed up growth for 2018 and 2019....

2 min read

Pat McKeough

ETFs

More gains ahead for base-metal ETFs

Base metals are highly cyclical commodities, closely tied to global economic growth. Copper, iron, zinc, nickel and aluminum are widely used in manufacturing and infrastructure development. In turn, those projects rely on steady global economic expansion.

The $1 trillion that the Trump administration proposes for infrastructure spending should boost demand for copper and other base metals....

2 min read

Pat McKeough

ETFs

The jury’s still out on ‘Smart Beta’

Traditionally, broad indexes, such as the TSX 60 or S&P 500, act as the benchmark for overall risk and return in their respective markets. However, these major indexes are market capitalization weighted. That means a few large stocks can dominate the index and stocks that rise in price are given increasingly large representation.

“Smart beta” ETFs aim to offer an alternative to that weighting system....

1 min read

Pat McKeough

ETFs

Economic growth spurs global banking

Under pressure from shareholders and regulators, banks around the world have spent the past decade rebuilding their balance sheets, reducing costs and returning to their core banking business. After the global financial crisis of 2008/2009, much tighter government regulations, increased compliance costs and low interest rates have kept the recovery modest....

2 min read

Pat McKeough

ETFs

Use ETFs to cut the risk of aggressive stocks

Apart from lower fees, ETFs offer a simple way for investors to participate in major trends without having to pinpoint the individual company, or companies, destined to dominate—whether that’s five, 10 or 15 years from now.

Take for example investors looking at companies focused on the needs of today’s aging population....

1 min read

Pat McKeough

ETFs

Pass on this ETF

JANUS LONG-TERM CARE ETF $23 (Nasdaq symbol OLD; TSINetwork ETF Rating: Aggressive; Market cap: $9.4 million) invests in companies that operate assistedliving and long-term-care facilities for the elderly and others.

The bulk of the fund’s assets (76%) are held in U.S....

1 min read

Pat McKeough

ETFs

Profit from an aging population

Declining fertility rates and rising life expectancies are responsible for a rapidly aging global population. In North America and Europe, the average senior retires relatively wealthy and plans to spend a significant portion of their money on staying healthy....

3 min read

Pat McKeough

ETFs

Copper surged in 2017

GLOBAL X COPPER MINERS ETF $27.76 (New York symbol COPX; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Copper Miners Index, which includes 20 to 40 global firms that mine and explore for copper. Germany-based Structured Solutions AG created the index in April 2010.

Canadian firms make up 30.6% of the ETF’s holdings....

1 min read

Pat McKeough

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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.

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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.

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Financial Post Columnist
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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.

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Inner Circle Pro subscriber

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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.