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
These ETFs tap international growth
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
Two new ETFs for Canadian investors
Last year, Canada saw the listing of 164 new ETFs. This month we highlight two of the most successful new launches in 2023. The first is an balanced ETF, while the second invests in technology companies with a covered call strategy.


PURPOSE ACTIVE BALANCED ETF $21.61 (Toronto symbol PABF) invests in a diverse set of asset classes through ETFs as follows: fixed income (41%), North American equity (28%), international equity (20%), and gold (4%)....
1 min read
Pat McKeough
ETFs
Here’s a look at the pros and cons of small caps
Smaller companies can generate higher returns than their larger counterparts, but their shares are often riskier and less liquid, and may underperform for long periods.


Small cap stocks are also more volatile in times of unsettled or falling markets.


Still, if you focus on the best-quality small companies—or ETFs that hold those stocks—they can be a worthwhile addition to a well-balanced portfolio


Do small companies have an edge?


Small companies trading on U.S....
2 min read
Pat McKeough
ETFs
U.S. new housing demand remains steady
The U.S. housing and homebuilding markets dropped in 2020 on fears that a COVID-induced catastrophe would disrupted the U.S. economy. The recovery, however, came quickly in 2021, aided by decades-low mortgage rates, limited housing supply, and a strong job market.


The recovery was nonetheless shortlived as the market slowed in 2022 on higher mortgage rates and weaker consumer confidence because of inflation....
2 min read
Pat McKeough
ETFs
ETF’s key holding SQM offers rewards but also risk
Sociedad Quimica Y Minera (ADR symbol SQM on New York) is currently the largest holding of the iShares MSCI Chile ETF (see above), making up 16% of its total assets. SQM is a large, low-cost producer of lithium, iodine, and specialty fertilizers.


SQM’s share price fluctuates in large part along with the prices of the commodities it sells....
1 min read
Pat McKeough
ETFs
Chile offers gains for aggressive investors
The Chilean economy will likely emerge from recession in 2024, further reducing joblessness and lifting wages. Consumer purchasing power will improve as inflation falls. Longer-term, as the world transitions to greener technologies, the global demand for copper, lithium, and renewable energy should rise....
5 min read
Pat McKeough
ETFs
Three small-cap ETFs for Canadian investors
Smaller firms can sometimes generate higher returns than their larger counterparts, but they are often riskier, less liquid, and may underperform for long periods. One way to offset some of the risk is to focus on ETFs that hold top-quality small-capitalization companies.


Here’s a look at three ETFs that meet that criteria....
4 min read
Pat McKeough
ETFs
We like this ETF’s holdings—but not its ‘capping’
BMO S&P/TSX CAPPED COMPOSITE INDEX ETF $28.09 (Toronto symbol ZCN; TSINetwork ETF Rating: Conservative; Market cap: $7.3 billion) tracks the S&P/TSX Capped Composite Index. The index includes over 200 top-ranked Canadian stocks, which represent more than 90% of the Canadian equity market....
1 min read
Pat McKeough
ETFs
Pass on this ETF: BMO Covered Call Canadian Banks ETFs
BMO COVERED CALL CANADIAN BANKS ETF $17.30 (Toronto symbol ZWB) holds shares of Canada’s six largest banks (CIBC, TD Bank, Bank of Montreal, Bank of Nova Scotia, Royal Bank and National Bank).


The fund started up in January 2011....
1 min read
Pat McKeough
ETFs
U.S. home builders lift your prospects
The U.S. housing construction and improvement markets have recovered strongly from the lows they hit at the start of the pandemic in March 2020. In fact, they have gone on to new highs.


That growth includes a big jump in late 2023. That rise was spurred by ongoing pent-up demand for housing....
2 min read
Pat McKeough
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