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.

[text_ad]

Read More Close

ETFs Library Archives

ETFs

Diversification lifts returns and cuts your risk

One key factor in successful investing—apart of course from picking good stocks (or ETFs that invest in those stocks)—is to diversify your portfolio.

Our main suggestion would be to make sure that your holdings are always well-balanced among most if not all of the five economic sectors—Manufacturing, Consumer, Utilities, Resources, and Finance.

That way, you avoid overloading yourself with stocks that are about to slump simply because of industry conditions or changes in investor fashion.

By diversifying across the sectors, you also increase your chances of stumbling upon a market superstar—a stock that does two to three or more times better than the market average....

2 min read

Pat McKeough

ETFs

All signs point to further e-commerce growth

Online commerce exploded for 2020 and 2021 as the COVID-19 pandemic limited consumers’ access to shopping malls and other traditional shopping outlets. However, as shoppers returned to physical stores in 2022 the rapid growth rate of online shopping slowed. Still, estimates indicate that the strong uptrend of online shopping has resumed in 2023 and will continue in the years ahead.

Growth slowed after pandemic boost

Global e-commerce retail sales (which includes all products and services ordered using the Internet, excluding travel, events, and money transfers) jumped by 50% between 2019 and 2021 to $5.0 trillion according to estimates from consulting firm eMarketer.

However, as shoppers returned to physical stores in 2022, e-commerce growth slowed globally to 6.5%....

3 min read

Pat McKeough

ETFs

Here are new ETFs for Canadian investors

This month we feature a very high-yielding financial services ETF from Hamilton Capital Partners, and a top-performing North American value equity ETF from RBC.

HAMILTON CANADIAN FINANCIALS YIELD MAXIMIZER ETF $13.12 (Toronto symbol HMAX) invests in the top 10 Canadian financial services companies as measured by their total market value....

1 min read

Pat McKeough

ETFs

The UAE is prominent among sovereign wealth funds

Sovereign wealth funds are state-owned investment funds that taps into a country’s cash reserves—and the number of sovereign wealth funds globally has grown steadily over the past two decades, from 62 funds in 2000 to 176 in 2023. During that time, assets under management jumped from $1 trillion to $11 trillion.

The largest of these wealth funds is the Norway Government Pension Fund with $1.5 trillion of assets.

Other funds among the top 10 are the China Investment Corporation, the Kuwait Investment Authority, and the Saudi-based Public Investment Fund....

1 min read

Pat McKeough

ETFs

The UAE continues to diversify beyond oil

The United Arab Emirates is a small country in a potentially volatile region, with neighbours like Yemen and Iran nearby. Still, it has used its oil riches wisely to diversify the economy and become a major commercial hub in the Middle East.

Here’s an ETF that provides exposure to the top companies listed in the UAE.

ISHARES MSCI UAE ETF $14.66 (New York symbol UAE; TSINetwork ETF Rating: Aggressive; Market cap: $35.0 million) tracks the performance of the largest publicly listed UAE companies.

Financial Services account for 39% of its assets, while Telecommunications (18%), Real Estate (21%), Industrials (10%), and Energy (5%) are other key segments.

The ETF has a portfolio of 40 stocks; the top 10 holdings make up a high 74% of its assets....

4 min read

Pat McKeough

ETFs

Boost your returns with global ETF exposure

We think that most Canadian investors should hold the bulk of their portfolios in high-quality, dividend-paying Canadian stocks (or ETFs that hold those stocks). We also feel that virtually all Canadian investors should have, say, 20% to 30% of their portfolios in U.S....

4 min read

Pat McKeough

ETFs

Pass on this ETF: Direxion Daily AMZN Bear 1X ETF

DIREXION DAILY AMZN BEAR 1X ETF $18.71 (New York symbol AMZD) holds short positions in the shares of only one company—Amazon.com. The ETF launched in September 2022 and has just $3.0 million in assets under management.

The objective of the ETF is to generate a return equivalent to the inverse of the daily return on the shares of Amazon....

1 min read

Pat McKeough

ETFs

Online commerce still offers solid gains

Online commerce grew steadily for a decade before the onset of COVID-19. It then took off in a major way. Still, as consumers returned to physical stores and workers returned to the office, that rapid growth slowed. Regardless, the long-term trend remains firmly positive, and the online transactions should continue to rise for years to come.

Here are two ETFs that include companies with a strong online presence....

3 min read

Pat McKeough

ETFs

Japan will spur your gains

ISHARES MSCI JAPAN INDEX FUND, $50.97, 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, 5.6%; Sony Corp., 3.1%; Mitsubishi UFJ Financial, 2.9%; Keyence (sensors), 2.3%; Tokyo Electron (computer chips), 1.9%; Sumitomo Mitsui Financial, 1.8%; Hitachi (conglomerate), 1.8%; and Mitsubishi Corp....

1 min read

Pat McKeough

ETFs

Buy 4 of these 6 ETFs to tap global growth

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

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.