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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Investors in this country can, however, buy exchange-traded funds, or ETFs, listed on U.S....
You can see our Exchange-traded Funds Portfolio for March 2023 here.
ETFs in brief
Exchange-traded funds are set up to mirror the performance of a stock-market index or sub-index....
Medium-sized companies are a bit like the proverbial middle child—they tend not to get as much attention from investors as the smallest or the biggest. But this creates opportunities for investors who are prepared to add the best of those stocks—or the ETFs that hold them—to their portfolios.
High-quality mid-cap stocks can offer you the stability and balance sheet strength of large caps, while at the same time they give investors growth potential similar to small caps.
What are mid-cap stocks?
Mid-cap stocks fall between large-cap stocks and small-cap stocks but the average size of mid-cap companies varies from market to market.
Index provider S&P ranks all U.S....
Purpose Investments launched a series of leveraged single-stock ETFs in December 2022. Here we discuss the ETF that holds Apple shares but there are also similar ETFs that invest in single large U.S. companies, These include Amazon, Berkshire Hathaway, Alphabet, and Exxon....
Long-term gains with more risk
Over the period since 2002, an investment in a basket of physical commodities delivered a return of just 5.4% per year, while commodity producers returned 9.5% per year; this compares with the 9.5% per year return of the S&P 500 index (see table below).
The IMF All Commodity Index provides a good measure of the performance of physical commodities as a group....
However, Mexico now seems poised to contribute a larger share of U.S....
Here is one ETF that provides exposure to the top Mexican publicly listed companies.
ISHARES MSCI MEXICO ETF $55.85 (New York symbol EWW; TSINetwork ETF Rating: Aggressive; Market cap: $1.25 billion) tracks the performance of the largest publicly listed Mexican companies.
Consumer Defensive stocks account for 29% of its assets, while Financial Services (18%), Communication Services (16%), Industrials (15%), and Basic Materials (12%) are other key segments.
The ETF holds a portfolio of 44 stocks; the top 10 holdings make up a sizeable 64% of holdings....
The fund aims to analyze millions of investment-related messages and posts on sites, like Reddit, Stocktwits and Twitter, using what it believes is sophisticated computer software....