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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

Consumer staples offer strength in downturns

Traditionally, the price of most stocks, and the ETFs that hold them, drop during market declines. However, certain segments generally perform better than the overall market. Below, we highlight three ETFs focused on firms that produce and sell consumer staples....

4 min read

Pat McKeough

ETFs

Pass on this ETF

ADVISORSHARES RESTAURANT ETF $19.05 (New York symbol EATZ) is an actively managed fund that invests globally in restaurants, bars, and food-service companies.

The portfolio is relatively concentrated, with 50 holdings, among them substantial individual holdings in Arcos Dorados (a large McDonald’s franchisee in Latin America), Restaurant Brands International, Texas Roadhouse, Dutch Bros, Chipotle, Darden Restaurants, and Restaurant Brands.

The ETF launched in April 2021 and has a small asset base of $2.5 million....

1 min read

Pat McKeough

ETFs

European ETFs offer long-term promise

European stocks continue to face near-term challenges as the war in Ukraine, record inflation and the continuing impact of the COVID-19 pandemic weigh on their prospects. Still, the long-term outlook for top European companies is strong, and many of these leading companies derive a significant chunk of their revenue from global exports; their solid balance sheets and low p/e’s also cut investor risk.

Here are two ETFs that aim to benefit from the opportunities presented by leading European-listed companies....

3 min read

Pat McKeough

ETFs

Buy Japan’s top performers

ISHARES MSCI JAPAN INDEX FUND, $50.28, 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, 5.1%; Sony Corp., 2.9%; Keyence (sensors), 2.6%; Mitsubishi UFJ Financial, 2.0%; Daiichi Sankyo (pharma), 2.0%; Softbank, 1.8%; KDDI (telecom), 1.7%; Nintendo (gaming), 1.6%; and Recruit Holdings (human resources), 1.5%....

1 min read

Pat McKeough

ETFs

Global ETFs: Four buys and two holds

All of the major global stock markets fell at the outbreak of COVID-19. Many top markets have since rebounded. We think the outlook remains positive for quality stocks, and one way to profit from that—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

Emerging markets are attractive, but with risks

Many investors have lost interest in investing in emerging markets (“EMs”) given their recent poor performance. Still, EM fundamentals remain sound, despite COVID-19-induced setbacks and higher inflation. The key emerging markets are also home to many top-notch global companies, available at reasonable, if not attractive valuations.

Emerging markets can deliver stellar returns

Over the past 30 years, investors in EMs have experienced slightly lower returns than investors in developed markets....

2 min read

Pat McKeough

ETFs

Cyberattacks: Big need for cybersecurity

Hackers, organized crime, and state-sponsored actors are increasingly targeting Internet-linked networks and databases to gain access to confidential information and extract large ransom payments.

The lucrative nature of online crime, combined with a relatively low risk of being caught, and a massive and growing target market, indicate that this criminal industry will continue its rapid growth.

However, companies that can provide effective protection against cybercrime will benefit from its expansion.

Criminals have a large target market

Attacks on individuals aim to steal personal and financial information while corporations are targeted to obtain client records and business secrets.

Cybercriminals have figured out ways to get paid (mostly in untraceable cryptocurrencies) to extract considerable payments from their victims....

2 min read

Pat McKeough

ETFs

Here are new ETFs for Canadian investors

This month we highlight a carbon credit ETF from TD Asset Management as well as an actively managed fintech ETF from Blackrock.

TD GLOBAL CARBON CREDIT INDEX ETF $36.87 (Toronto symbol TCBN) seeks to track the performance of a global carbon credit index, which measures the investment return of global cap-and-trade carbon emission credits.

The ETF passively tracks the Solactive Global Carbon Credit Index....

1 min read

Pat McKeough

ETFs

Indonesian tourism is regaining momentum

Tourism is an important part of the Indonesian economy, contributing directly and indirectly about 5% to the country’s GDP in normal years.

In 2019, Indonesia welcomed 16 million international tourists, who spent $17 billion during that year. The industry is credited with employing an estimated 4.7 million people, or 4% of the total workforce.

The Indonesian tourism industry grew considerably between 2000 and 2019 with foreign arrivals increasing by 240%.

Most of the tourists hailed from China, Malaysia, and Australia....

1 min read

Pat McKeough

ETFs

Indonesian ETF is a gateway to Asian growth

Indonesia’s 280 million citizens make it the world’s fourth-most-populous country and Southeast Asia’s largest economy. The nation’s successful and popular president was the first leader to emerge from outside of Indonesia’s military elite. His government is now focused on keeping the recovery from the pandemic on track.

ISHARES MSCI INDONESIA ETF $23.16 (New York symbol EIDO; TSINetwork ETF Rating: Aggressive; Market cap: $495.1 million) tracks the performance of a broad basket of publicly listed Indonesian companies.

The ETF holds a diversified portfolio of 82 stocks, but it is heavily concentrated in the top 10 which make up 62% of total assets....

4 min read

Pat McKeough

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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.