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

Two new ETFs for Canadian investors

Royal Bank is the partner of BlackRock for the distribution of the iShares ETFs in Canada. But the Royal Bank platform also hosts a considerable number of RBC branded ETFs. The Bank recently expanded its ETF roster by adding RBC-branded ETFs that mirror existing actively managed mutual funds.

RBC NORTH AMERICAN GROWTH ETF $20.47 (NEO exchange symbol RNAG) invests in U.S....

1 min read

Pat McKeough

ETFs

Warren Buffett likes Japan’s investment outlook

On August 30, 2020, the day of his 90th birthday, billionaire investor Warren Buffett announced that his Berkshire Hathaway company (symbol BRK.B on New York) had acquired a little over 5% of each of five Japanese trading companies, or Sogo Shosha as they are called in Japan.

The five are Itochu Corp., Marubeni Corp, Mitsubishi Corp., Mitsui & Co., and Sumitomo Corp....

1 min read

Pat McKeough

ETFs

Japan offers investors a bright future

The Japanese economy ranks third in the world and hosts some of the most-profitable global corporations.

The economy is, however, facing a declining and rapidly aging population. Still, an older population also presents opportunities, and Japanese companies are already coming up with innovative and technology-driven aids for the elderly....

5 min read

Pat McKeough

ETFs

High-yield ETFs—two buys, one avoid

High interest rates mean dividend-paying stocks must increasingly compete for investor interest with bonds and other fixed-income instruments. However, focusing on sustainable dividends still offers an attractive and growing income stream for investors—as long as you avoid the riskier strategies that some ETF managers use to boost their yields (see supplement on page 60).

Here are three ETFs that aim to provide high-yield exposure to Canadian, as well as U.S., dividend payers.

VANGUARD FTSE CANADIAN HIGH DIVIDEND ETF $42.00 (Toronto symbol VDY; TSINetwork ETF Rating: Aggressive; Market cap: $2.1 billion) tracks the FTSE Canada High Dividend Yield Index....

4 min read

Pat McKeough

ETFs

Pass on this ETF: iShares GSCI Commodity Dynamic Roll Strategy ETF

ISHARES GSCI COMMODITY DYNAMIC ROLL STRATEGY ETF $26.17 (New York symbol COMT) invests in a broad range of commodities. At the end of March 2023, the fund’s asset were effectively distributed to energy (57%), agriculture (19%), industrial metals (12%), and livestock (8%)....

1 min read

Pat McKeough

ETFs

Tap into robots and artificial intelligence

The growing commercial use of robots and computers with sophisticated learning and problem-solving skills continues to change the manufacturing and service sectors.

Here is a look at two exchange-traded funds that provide easy access to companies now leading the development of robotics, artificial intelligence (AI) and automation.

GLOBAL X ROBOTICS & ARTIFICIAL INTELLIGENCE ETF $25.57 (Nasdaq symbol BOTZ; TSINetwork ETF Rating: Aggressive; Market cap: $1.7 billion) invests in companies that benefit from the growing use of robotics and artificial intelligence.

The fund invests globally: the U.S....

3 min read

Pat McKeough

ETFs

Buy Japan’s leading stocks

ISHARES MSCI JAPAN INDEX FUND, $58.63, is a buy. The ETF (New York symbol EWJ; buy or sell through brokers; us.ishares.com) aims for the return of the Morgan Stanley Capital International (MSCI) Japan Index.

The fund’s top holdings include Toyota, 4.3%; Sony Corp., 3.5%; Keyence (sensors), 2.7%; Mitsubishi UFJ Financial, 2.3%; Daiichi Sankyo (pharma), 1.8%; Hitachi (conglomerate), 1.6%; Sumitomo Mitsui Financial, 1.6%; Shin Etsu Chemical, 1.6%; and KDDI (telecom), 1.5%....

1 min read

Pat McKeough

ETFs

Buy four of these for global exposure

Most top international markets have rebounded since their big drop with the outbreak 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 that we believe are suitable for your new buying....

7 min read

Pat McKeough

ETFs

A 12-point checklist for finding quality ETFs

The best ETFs offer low fees and diverse exposure to several companies operating in an economy or a specific industry or region. They don’t, however, eliminate market volatility, although their diversity usually cuts your risk of permanent loss. ETFs can also cut down research time required to analyze individual stocks when building a portfolio.

Meanwhile, here’s a 12-point checklist to help you find the gems among the rising number of ETFs out there for investors:

1) A stable and reputable parent company

Although ETFs are well regulated in both Canada and the U.S., investors still need to check which entities are responsible for the promotion and management of the ETF and its assets....

6 min read

Pat McKeough

ETFs

Here are two new ETFs for Canadian investors

This month we feature an ETF that aims to deliver high income by using leverage and derivative instruments. The second comes from iShares and invests globally in companies that it sees as being at the forefront of electric and autonomous vehicle development.

MULVIHILL U.S....

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.

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.