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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

The large underground economy of Italy

An informal economy (or underground economy) is the part of an economy that is neither taxed nor monitored by any form of government. Informal economic activity ranges from unregistered legal activities to outright illegal activities. Examples include undocumented employment, fraudulent accounting practices, small-scale farming, gambling, prostitution, drug dealing and smuggling.

Economists identify two main factors that drive economic activity underground—the pace of economic development and the quality of societal institutions....

1 min read

Pat McKeough

ETFs

Buy this ETF for the top Italian stocks

The Italian economy has recovered well from the pandemic setback, but growth slowed last year as high energy costs and interest rates weighed on consumers. Unemployment, especially among the youth, has improved, but a large, untaxed informal sector (see box next page) and high government debt remain challenges.

Still, the country is home to some exceptional companies, such as Ferrari, that flourish despite the difficult overall economic situation.

Here is one ETF that provides exposure to the top public companies in Italy.

ISHARES MSCI ITALY ETF $37.51 (New York symbol EWI; TSINetwork ETF Rating: Aggressive; Market cap: $412.5 million) invests in publicly listed Italian companies.

Financial companies account for 32% of its assets, while Consumer Cyclicals (22.0%), Utilities (16%), Energy (8%), and Industrials (9%) are other key segments.

The ETF holds a portfolio of 24 stocks; the top 10 comprise 66% of its assets....

5 min read

Pat McKeough

ETFs

Diversify your portfolio with mid-cap stocks

Many investors overlook mid-cap stocks, thinking that a combination of large- and small-cap stocks will provide their portfolios with all the diversification they need. However, as a group, U.S. mid-cap stocks have often performed better than large caps and are generally less risky than small caps....

4 min read

Pat McKeough

ETFs

Pass on this ETF: Global X Gold Producer Equity Covered Call ETF

GLOBAL X GOLD PRODUCER EQUITY COVERED CALL ETF $25.08 (Toronto symbol GLCC) invests in an equal-weighted portfolio of North American-listed gold mining companies. The portfolio currently holds 10 stocks, with all the top producers such as Barrick Gold and Newmont Corp....

1 min read

Pat McKeough

ETFs

Precious metals can boost your returns

Precious metals should let you profit over the next few years if interest rates begin falling (a clear possibility). That lowers the appeal of the U.S. dollar and increases the appeal of gold—and other precious metals—as a store of value. Here we look at three ETFs that aim to benefit from the long-term positive trends in precious metals (see the supplement on page 59 for more on precious metals and their role in your portfolio).

SPROTT PHYSICAL GOLD AND SILVER TRUST $29.44 (Toronto symbol CEF; TSINetwork ETF Rating: Aggressive; Market cap: $6.2 billion) invests in physical gold and silver bullion held in the vaults of the Royal Canadian Mint....

3 min read

Pat McKeough

ETFs

Japan’s future is bright

ISHARES MSCI JAPAN INDEX FUND, $67.11, is a buy. The ETF (New York symbol EWJ; buy or sell through brokers; us.ishares.com) aims to mirror the return of the Morgan Stanley Capital International Japan Index.

The fund’s top holdings include Toyota, 6.3%; Mitsubishi UFJ Financial, 2.9%; Tokyo Electron (computer chips), 2.7%; Sony Corp., 2.7%; Keyence (sensors), 2.3%; Hitachi (conglomerate), 2.1%; Mitsubishi Corp....

1 min read

Pat McKeough

ETFs

Six top international ETFs: 4 buys, 2 holds

Most top international markets have rebounded since their big drop at the start of the pandemic. Going forward, we think the outlook remains positive for quality stocks in those markets. One way to profit from their growth—while cutting your risk—is to invest in top ETFs.

Here’s a look at four international funds we see as suitable for your new buying....

7 min read

Pat McKeough

ETFs

Here’s our Exchange-traded Funds Portfolio for May 2024

You Can See Our Exchange-Traded Funds Portfolio For May 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

The five sector approach is a key TSI concept

A key aspect of our TSI investment philosophy is portfolio diversification across the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities).

That way, investors can avoid overloading their portfolios with stocks in one sector that are about to slump simply because of industry conditions or changes in investor fashion....

5 min read

Pat McKeough

ETFs

Two new ETFs for Canadian investors

Fidelity recently boosted its Canadian ETF roster by adding seven new ETFs covering Canadian, U.S., and international equities. Below we highlight a fund that holds long and short positions in a portfolio of global equities, as well as an ETF that invests indirectly in public companies outside of North America.

FIDELITY GLOBAL VALUE LONG/SHORT ETF $8.53 (CBOE Canada symbol FGLS) invests globally by taking long positions in companies that the manager believes are undervalued; at the same time it takes short positions in overvalued companies.

The ETF launched on February 1, 2024, as just one of several share classes of a mutual fund operating since October 2020....

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.

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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

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.

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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.

Walter H.
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.