ETFs
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
This section is the second part of our discussion on ETFs that represent each of the five main stock market sectors. Here we cover the consumer sector (which includes healthcare), manufacturing/industrials and financials.
GLOBAL X US LARGE CAP INDEX ETF $123.10 (Toronto symbol HULC; TSINetwork ETF Rating: Conservative; Market cap: $588.8 million) invests in U.S. publicly listed companies. The ETF does not hedge its currency exposure.
The fund aims to track the Solactive US Large Cap Index. That index includes large companies listed on the U.S. public markets. Stocks are weighted based on their market values.
Information technology companies form a large part of the portfolio (33%), while Financials (12%), Consumer Cyclical (10%), Healthcare (10%), Communication Services (11%), and Industrials (9%), are other key segments.
The fund aims to track the Solactive US Large Cap Index. That index includes large companies listed on the U.S. public markets. Stocks are weighted based on their market values.
Information technology companies form a large part of the portfolio (33%), while Financials (12%), Consumer Cyclical (10%), Healthcare (10%), Communication Services (11%), and Industrials (9%), are other key segments.
BMO U.S. PUT WRITE ETF $15.02 (Toronto symbol ZPW) sells put options on a range of U.S. large-cap stocks to generate income for the ETF. These options give the put buyers the right to sell specific stocks to the ETF at a pre-determined price. Buyers profit when a stock’s price falls, as they can then buy shares at cheaper prices on the open market and sell them to the ETF at much higher prices.
The fund doesn’t hold any of the underlying stocks. Instead, its assets are held in U.S. Treasury bills or other cash equivalents, thus meeting regulatory requirements for a “cash cover” of its options exposure.
The main objective of the ETF is to use the proceeds from the put options to pay distributions. As a result, it yields a high 10.05%.
The fund doesn’t hold any of the underlying stocks. Instead, its assets are held in U.S. Treasury bills or other cash equivalents, thus meeting regulatory requirements for a “cash cover” of its options exposure.
The main objective of the ETF is to use the proceeds from the put options to pay distributions. As a result, it yields a high 10.05%.
ISHARES MSCI JAPAN INDEX FUND, $86.81, 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.
Top holdings are Mitsubishi UFJ Financial, 4.0%; Toyota., 3.7%; Hitachi (conglomerate), 3.2%; Advantest (chip testing), 3.1%; SoftBank (investment holdings), 2.7%; Tokyo Electron (computer chips), 2.7%; Sumitomo Mitsui Financial, 2.5%; Sony Corp., 2.5%; and Mizuho Financial Group, Inc., 2.1%. The ETF’s MER is reasonable at 0.50%.
Top holdings are Mitsubishi UFJ Financial, 4.0%; Toyota., 3.7%; Hitachi (conglomerate), 3.2%; Advantest (chip testing), 3.1%; SoftBank (investment holdings), 2.7%; Tokyo Electron (computer chips), 2.7%; Sumitomo Mitsui Financial, 2.5%; Sony Corp., 2.5%; and Mizuho Financial Group, Inc., 2.1%. The ETF’s MER is reasonable at 0.50%.
Below, we highlight an ETF that’s soaring. The iShares MSCI Brazil Index ETF is up 22% since the start of this year. The gain largely reflects the soaring price for its largest holding, Petrobras, the majority state-owned oil company. Disruption to Iran/Middle East shipping routes has pushed oil prices—and the stock—higher.
Even so, it’s uncertain how long Petrobras will stay high; meantime the country’s challenges are significant. The ETF is okay to hold, but only for investors willing to accept the risk of a sharp oil-price drop.
Even so, it’s uncertain how long Petrobras will stay high; meantime the country’s challenges are significant. The ETF is okay to hold, but only for investors willing to accept the risk of a sharp oil-price drop.
You Can See Our Exchange-Traded Funds Portfolio For May 2026 Here.
ETFs in brief
Exchange-traded funds are set up to mirror the performance of a stock-market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings of that index or sub-index and will allow the fund to “track” its performance.
ETFs in brief
Exchange-traded funds are set up to mirror the performance of a stock-market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings of that index or sub-index and will allow the fund to “track” its performance.
All in all, we see the recent drop in software stocks as a chance to add the leaders (see page 43) to a well-balanced portfolio. Note, though, that given the uncertainty in the industry right now over AI disruption, even the top stocks (or the ETFs that hold them) are best suited for the more aggressive segment of your holdings.
The recent sharp declines in the stock prices of software giants like Salesforce, Microsoft, ServiceNow, Intuit, Booking Holdings, Palo Alto, Adobe and Thomson Reuters were partly driven by a re-evaluation of software business models due to fears of disruption by competing products driven by artificial intelligence (AI).
Investors fear that advanced AI tools can now recreate complex software solutions quickly and with far fewer resources. In addition, traditional seat-based subscription models are under threat; if one AI agent can do the work of several junior analysts, clients may require fewer software licenses. That would lead to lower seat-based demand for established software firms.
The recent sharp declines in the stock prices of software giants like Salesforce, Microsoft, ServiceNow, Intuit, Booking Holdings, Palo Alto, Adobe and Thomson Reuters were partly driven by a re-evaluation of software business models due to fears of disruption by competing products driven by artificial intelligence (AI).
Investors fear that advanced AI tools can now recreate complex software solutions quickly and with far fewer resources. In addition, traditional seat-based subscription models are under threat; if one AI agent can do the work of several junior analysts, clients may require fewer software licenses. That would lead to lower seat-based demand for established software firms.
This month, we highlight two new funds—the first is an actively managed cryptocurrency ETF from 1832 Asset Management. The second is a rules-based global equity ETF from BMO Asset Management.
Vietnam’s tourism industry has undergone a remarkable transformation, with international tourists increasing threefold over the past decade. This growth is driven by a blend of breathtaking natural landscapes, a deep and accessible history, and a reputation for exceptional hospitality.
Infrastructure development has played a critical role in this expansion. The government has prioritized the modernization of international airports, the expansion of high-speed rail links, and the simplification of e-visa processes.
Infrastructure development has played a critical role in this expansion. The government has prioritized the modernization of international airports, the expansion of high-speed rail links, and the simplification of e-visa processes.
The Vietnamese economy has been an outstanding performer among its global peers over the past three decades and continues to do well. The country has also benefited from strong growth in international tourist arrivals, as well as numerous major global companies establishing manufacturing facilities in Vietnam.