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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 biotech industry is exciting but risky

Biotechnology is a science-driven industry that uses living organisms and molecular biology to produce healthcare-related products. Biotechnology is best known for its role in medicine and pharmaceuticals, but the science is also applied in other areas such as genomics, food production, and the production of biofuels.

The term biotechnology was first used by Károly Ereky in 1919 to refer to the production of products from raw materials with the aid of living organisms....

3 min read

Pat McKeough

ETFs

Two new ETFs for Canadian investors

Invesco is one of the top global fund managers and it recently made another product available to Canadian investors. Horizons has also become one of the largest Canadian ETF managers by launching creative new products.

INVESCO MORNINGSTAR GLOBAL ENERGY TRANSITION ETF $19.43 (Toronto symbol IGET) invests globally in companies that are expected to benefit from the quest to address climate change and reduce greenhouse gases.

The ETF aims to track the Morningstar Global Energy Transition Index....

1 min read

Pat McKeough

ETFs

The U.S. loses a coveted AAA credit rating on its debt

The major credit rating agency Fitch recently downgraded the U.S. sovereign government debt rating to AA+. This follows a similar ratings downgrade by S&P in 2011.

The reasons cited by Fitch for the downgrade include the ongoing deterioration in the U.S....

1 min read

Pat McKeough

ETFs

United States: Unparalleled long-term prospects

The United States has been the world’s leading economy for many decades—and we think U.S. companies will continue to offer ETF investors unparalleled opportunities.

Here is an ETF that provides exposure to the top U.S. stocks.

VANGUARD TOTAL STOCK MARKET ETF $82.24 (Toronto symbol VUN; TSI Network ETF Rating: Aggressive; Market Cap: $6.5 billion) tracks the performance of a broad basket of U.S....

5 min read

Pat McKeough

ETFs

Surging demand for A/C will spur energy demand

The six hottest years ever recorded have all come since 2015. In 2022 (the fifth warmest year on record) the global average mean temperature was around 1.1 degrees Celsius above pre-industrial levels—with 28 countries experiencing their hottest year ever. This trend continued in 2023, with July 2023 being the hottest month in recorded history.

Heatwaves—and the resulting wider cooling needs— are expected to increase in frequency and intensity as average temperatures rise and populations grow and become increasingly urbanized.

According to the International Energy Agency (IEA), there are around 1.5 billion household air conditioners worldwide—and that is expected to increase to 2.2 billion in 2030 and 4.4 billion in 2050....

1 min read

Pat McKeough

ETFs

Fossil fuels will be around for a while yet

Oil and gas prices have pulled back lately, but still remain high. Meanwhile, demand should remain elevated for several years to come as the world continues to rely on fossil fuels even as it shifts to more-sustainable renewable energy sources.

Here are three ETFs that focus on oil and gas exploration and production....

4 min read

Pat McKeough

ETFs

Pass on this ETF: Ark Genomic Revolution ETF

ARK GENOMIC REVOLUTION ETF $31.33 (CBOE symbol ARKG) invests globally in companies it expects to benefit from the development of products and services meant to improve the quality of life. Those firms are involved in molecular diagnostics, gene therapy, targeted therapeutics, agricultural biology, and stem cells.

The ETF launched in October 2014 and has built up a substantial asset base of $2.1 billion....

1 min read

Pat McKeough

ETFs

Use these to boost your biotech exposure

Biotechnology companies have been at the forefront of some of the most exciting developments in healthcare over the past two decades—and there are more developments in the pipeline. However, the high cost of product development, long lead times for product testing and regulatory approvals, and low success rates add to their risk.

Here are two ETFs that benefit from the opportunities presented by biotech firms despite those challenges....

3 min read

Pat McKeough

ETFs

This REIT ETF is a hold

ISHARES S&P/TSX REIT INDEX ETF, $16.23, is a hold. The ETF (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) lets investors tap all 16 Canadian real estate investment trusts in the S&P/TSX REIT Index....

1 min read

Pat McKeough

ETFs

Tap solar’s bright outlook

INVESCO SOLAR ETF, $58.28, is a buy for aggressive investors. The ETF (New York symbol TAN; buy or sell through brokers) tracks solar-related companies (including technology firms and utilities) listed on global exchanges.

The fund’s top holdings are First Solar (China; solar panels) at 11.6%; Enphase Energy (U.S.; home solar systems), 8.9%; SolarEdge Technologies (Israel; solar-power batteries), 7.2%; Xinyi Solar (China; solar panels), 5.4%; GCL Technology (China; polysilicon), 5.3%; and Sunrun (U.S.; solar panels), 4.5%. The ETF charges a relatively high MER of 0.69%.

Renewable stocks have drifted down since early 2021; that follows big run-ups in 2020 on President Biden’s support for sun, wind and hydro power—plus strong investor interest in stocks gaining from environmental concerns....

1 min read

Pat McKeough

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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.