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
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
ETFs
These ETFs hold top precious-metal miners
An investment mania usually begins as a mass attraction to a specific investment, or investment area. It often ends up including a range of investments that bear only a passing resemblance.

The current mania for bitcoin and other cryptocurrencies— which we think will end badly for most investors—is grounded in several factors....
2 min read
Pat McKeough
ETFs
Buy the best of Japan
ISHARES MSCI JAPAN INDEX FUND $61.12 (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’s top holdings include Toyota, 4.6%; Mitsubishi UFJ Financial, 2.4%; Softbank, 2.1%; Honda Motor, 1.6%; Sumitomo Mitsui Financial, 1.6%; Sony Corp., 1.6%; Keyence Corp., 1.5%; Fanuc Corp., 1.3%; and KDDI Corp....
1 min read
Pat McKeough
ETFs
Profit from China’s growth
GUGGENHEIM CHINA SMALL CAP ETF $30.63 (New York Exchange symbol HAO; buy or sell through brokers; www.guggenheimfunds. com) aims to track the AlphaShares China Small Cap Index. It’s made up of the 347 Chinese stocks that foreign investors are allowed to hold and that have market caps between $200 million and $1.5 billion....
1 min read
Pat McKeough
ETFs
Future demand set to boost lithium supply
Lithium stocks have soared over the past 18 months as investors bet growing demand could lead to supply shortages.

Lithium is mostly used for industrial applications, such as glass, ceramics and lubricants, and to a minor extent for battery manufacturing and in consumer electronics....
2 min read
Pat McKeough
ETFs
Robotics to revolutionize the global economy
Robots are machines designed to perform operations without human intervention. New software developments in artificial intelligence (AI) continue to increase the learning and problem-solving capabilities of machines. Together, these technologies are set to revolutionize the way we complete tasks, analyze data and make decisions.

The McKinsey Global Institute estimates that robots and automation will replace 800 million workers by 2030.

Commercial interest in the space is intense: Last year, 50 robotics companies were sold globally for more than $19 billion....
3 min read
Pat McKeough
ETFs
Insights into Canadian ETFs
Beta is a commonly used, but sometimes misleading measure of volatility. To calculate a stock’s beta, an index like the S&P/TSX Composite or the S&P 500 is assigned a beta of 1.0. The historical volatility of different stocks relative to the index are then measured.

If a stock has a beta of 1.0, then it means that the market and the stock move up or down together at the same rate....
1 min read
Pat McKeough
ETFs
New ETFs for the Canadian market
Here are three new ETF launches. Each uses “quanitative modelling.” That may make their investment approach sound scientific; however, in our view, it will likely detract from their long-term returns. Many ETFs that use a socalled “black box” to pick stocks find the approach works only for a while, or in retrospect....
2 min read
Pat McKeough
ETFs
U.S. REITs for Canadian Investors
The U.S. opens up a big market for Canadians looking to invest in commercial real estate. However, direct access to that real estate (multi-family, retail, offices or industrial properties) is difficult for most Canadian individual investors.

As with all commercial real estate, the large size of those transactions can block investment....
1 min read
Pat McKeough
ETFs
Low-fee ways to hold U.S. and global REITs
VANGUARD U.S. REIT ETF $84 (New York symbol VNQ; TSINetwork ETF Rating: Conservative; Market cap: $35.1 billion) provides exposure to a selection of U.S. real estate investment trusts (REITs). The fund does that by tracking the MSCI U.S. REIT Index....
2 min read
Pat McKeough
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