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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

Two new ETFs for Canadian investors

This month we discuss two new ETFs that aim to use derivative instruments to target specific investment outcomes. The BMO U.S. Equity Buffer ETF promises upside potential along with limited downside protection against U.S. market declines. The Harvest Industrial Leaders Income ETF plans to supplement the dividend income of a portfolio of U.S....

1 min read

Pat McKeough

ETFs

The troubles of the Chinese real estate sector

The Chinese real estate sector has been struggling since 2021. That’s when the authorities introduced measures to curb debt levels at large real estate development companies. Since then, more than 50 Chinese property developers have defaulted on their international debts....

1 min read

Pat McKeough

ETFs

China’s promise comes with considerable risk

The Chinese economy expanded rapidly between 2000 and 2019 when annual growth averaged a high 9%. It has recovered from the pandemic, but its growth trajectory going forward is uncertain. That’s because of factors like the trade war with the U.S. and other Western countries (including a ban on AI chip exports to China), as well as a major property sector downturn....

4 min read

Pat McKeough

ETFs

Exchange-traded funds—where is the money flowing?

By the end of May 2024, ETF assets listed in the U.S. were valued at $9.0 trillion—that’s after the addition of $356 billion in new assets in the first five months of 2024.

Most ETF money in the U.S. market is invested in stocks (77%), followed by fixed-income funds (18%).

Within the stocks component, the money mainly goes into U.S....

1 min read

Pat McKeough

ETFs

High-quality firms help you build wealth

One of the best methods of building wealth over time is to zero in on the shares of companies (or the ETFs that hold them) with sound fundamental value. That includes a history of consistently strong sales and earnings, or cash flow. A solid balance sheet and a strong hold on a growing clientele are also pluses.

Here are three ETFs that aim to select high-quality companies with solid value: One ETF focuses on well-established U.S....

4 min read

Pat McKeough

ETFs

Here’s a low-cost ETF to invest internationally

VANGUARD TOTAL WORLD STOCK ETF $115.87 (New York symbol VT; TSINetwork ETF Rating: Conservative; Market cap: $49.3 billion) tracks the FTSE Global All-Cap Index. U.S. companies make up the largest component of the portfolio (58.7%), then Japan (6.1%), the U.K....

1 min read

Pat McKeough

ETFs

Pass on this ETF: Vaneck Vectors Social Sentiment ETF

VANECK VECTORS SOCIAL SENTIMENT ETF $22.00 (New York symbol BUZZ) follows the BUZZ NextGen AI US Sentiment Leaders Index. This index tracks the 75 large-cap U.S. stocks showing what it sees as the highest degree of “positive investor sentiment.”

The ETF aims to analyze millions of investment-related messages and posts on sites like Reddit, Stocktwits, Twitter using what it believes is sophisticated computer software....

1 min read

Pat McKeough

ETFs

Utilities are attractive right now

High interest rates boost bond yields—and their appeal with investors. Conversely, those high or rising rates can hurt the appeal of high-yield utilities, and their shares, since utilities are then forced to pay higher interest on their debt. However, with interest rates falling in Canada, and poised to fall in the U.S., the outlook for high-quality utilities is attractive for investors seeking high dividend yields and growth prospects.

Below we discuss two utilities ETFs....

3 min read

Pat McKeough

ETFs

Buy the best of Taiwan

ISHARES MSCI TAIWAN INDEX FUND, $55.27, is a buy for aggressive investors. The ETF (New York symbol EWT; buy or sell through brokers) gives you direct exposure to some of the top public companies of this East Asian powerhouse economy.

The fund’s largest holding is Taiwan Semiconductor at 23.8% of assets....

1 min read

Pat McKeough

ETFs

Six North American ETFs: 5 buys, 1 hold

The major Canadian and U.S. stock markets, while still subject to volatility, continue to offer attractive returns for investors—especially if you buy the top stocks. All in all, we think that if you can afford to stay in the market for several years or longer, now is a good time for new buying....

4 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
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

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Subscriber since 1996. Inner Circle Member Since 2006
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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.