ETFs - The Successful Investor Inc

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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You Can See Our Exchange-Traded Funds Portfolio For October 2024 Here.

ETFs in brief

Exchange-traded funds are set up to mirror the performance of a stock-market index or sub-index....

1 min read

Pat McKeough

ETFs

Japan must contend with its aging population

Japan’s population is getting older, and with an average age of 49.5 years, is the oldest population in the world. While people are living longer the fertility rate is declining—women are expected to bear only 1.3 children during their lifetimes.

Given the low fertility rate, the Japanese population is expected to decline by about a quarter, from 125 million today to 96 million by 2060....

1 min read

Pat McKeough

ETFs

New ETFs for Canadian investors

This month we look at an ETF from Brompton that selects companies with a high free cash flow yield. A second highlighted ETF comes from RBC iShares. It invests in the companies held in the S&P 500 Index, but reduces stock concentration by capping individual stock weights at 3%.

Brompton International Cash Flow Kings ETF $9.82 (Toronto symbol KNGX) invests in listed companies outside North America with high free cash flow (regular cash flow less maintenance capital expenditures) per share....

1 min read

Pat McKeough

ETFs

Japan continues to overcome its challenges

The Japanese economy ranks third in the world and hosts some of the most-profitable global corporations.

The economy is, however, facing a declining and rapidly aging population. (See box next page.) Still, an older population also presents opportunities, and Japanese companies are already coming up with innovative and technology-driven aids for the elderly....

5 min read

Pat McKeough

ETFs

Tap into key trends with these healthcare ETFs

The underlying growth trends for healthcare remain strong as the global population grows older and emerging economies become wealthier.

Meanwhile, new technologies and artificial intelligence (AI) will serve to boost the already-strong prospects of healthcare stocks by improving the management of patient diagnostics, administrative processes, and drug discoveries....

4 min read

Pat McKeough

ETFs

Pass on this ETF

One of the main attractions of exchange-traded funds is their lower fees compared to mutual funds. In the large and highly competitive U.S. ETF market, fees have declined rapidly to the extent that some “plain vanilla” funds that simply track the major indexes charge 0.05% or less....

1 min read

Pat McKeough

ETFs

Here’s a low-cost ETF for exposure to top Canadian stocks

TD CANADIAN EQUITY INDEX ETF $26.59 (Toronto symbol TTP; TSINetwork ETF Rating: Conservative; Market cap: $1.9 billion) invests in large and medium-sized publicly listed Canadian companies.

The ETF aims to track the Solactive Canada Broad Market Index.

The fund currently holds 276 stocks; the largest segment weighting is allocated to Financial companies (31%), followed by Energy (17%), Basic Materials (14%) Technology (8%), and Industrials (7%).

The top 10 holdings make up 34% of its assets....

1 min read

Pat McKeough

ETFs

Global infrastructure’s outlook is bright

Governments around the world know the benefits that flow from the development of better infrastructure. However, their stretched budgets and a reluctance to increase taxes hamper their ability to initiate these projects. This provides opportunities for publicly listed companies to develop and manage these assets.

Meanwhile, those stocks with exposure to U.S....

3 min read

Pat McKeough

ETFs

Two top ETFs from the Vanguard Group

Generally speaking, Canadians are blocked from buying mutual funds that are registered in the U.S. unless those funds are also registered with provincial securities commissions. (Moreover, some Canadian mutual funds are only available in a limited number of provinces.)

Investors in this country can, however, buy exchange-traded funds, or ETFs, listed on U.S....

2 min read

Pat McKeough

ETFs

Own the best solar stocks

INVESCO SOLAR ETF, $40.28, is a buy for aggressive investors. The ETF (New York symbol TAN; buy or sell through brokers) tracks solar-related companies (including technology firms and utilities) listed on global exchanges.

Its top holdings are First Solar (China; solar panels), 16.0%; Enphase Energy (U.S.; home solar systems) at 9.3%; NEXTracker Inc....

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.