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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

South Korea’s ‘ants’ drove many stocks to new highs

Driven by a retail trading frenzy, the Korea Exchange advanced by 120% from its bottom in March 2020 until mid-2021.

Large, global companies, such as Samsung, Posco, LG Electronics, Hynix, and Hyundai, performed well, but more speculative stocks such as Celltrion, Kakao, and Seegene soared between 250% and 1,100% as retail investors engaged in frenzied day trading.

The Korea Exchange is home to 2,448 companies with a market value of $2.6 trillion, about the same size as the Toronto Stock Exchange....

1 min read

Pat McKeough

ETFs

Still-bright outlook for investors in South Korea

This East Asian country managed the COVID-19 pandemic well, with the government implementing massive stimulus programs to boost the economy. All this has set South Korea up for a strong post-pandemic rebound. Meanwhile, many stocks now trade at attractive valuations....

4 min read

Pat McKeough

ETFs

Focus on high yields that are sustainable

High-yielding ETFs have appeal for income-seeking investors. The income they provide can also provide a buffer in declining markets. However, you need to look closely at the strategies that let those ETFs pay their high yields—and whether they are worth the risks.

Below we look at three ETFs that aim to provide investors with high yields....

4 min read

Pat McKeough

ETFs

Pass on these ETFs

The U.S.-based investment manager AXS Investments recently launched eight new exchange-traded funds that offer long or short positions in single stocks. Here are some examples of the stocks targeted by the ETFs.

The AXS TSLA Bear Daily ETF (Nasdaq symbol TSLQ) offers daily returns that correspond to the inverse of the daily gains or losses of Tesla shares.

The AXS 1.5x Bull Daily ETF (Nasdaq symbol PYPT) aims to achieve 1.5 times the daily returns of the shares of PayPal Holdings.

The AXS 2x NKE Bull Daily ETF (Nasdaq symbol NKEL) seeks daily returns 2 times the daily returns of the shares of Nike.

The 2x PFE Bull Daily ETF (Nasdaq symbol PFEL) targets 2 times the daily return of the common shares of Pfizer.

There are also ETFs that offer short positions on Nvidia, PayPal, Nike, and Pfizer.

The ETFs listed on July 14, 2022, and their MERs are 1.15% (1.57% after July 31, 2023).

As a general rule, we advise against market timing, much like we advise against short selling, options trading, leverage, currency speculation and bond trading....

1 min read

Pat McKeough

ETFs

REITs have appeal despite higher rates

Most real estate stocks and REITs were well on their way to recovering their pre-COVID highs when interest rates began to rise. But those higher rates worried investors and dramatically slowed that recovery.

Still, for most real-estate classes (except for office buildings), occupancies have risen back to pre-pandemic levels, and rents are rising....

2 min read

Pat McKeough

ETFs

Japan sets you up for gains

ISHARES MSCI JAPAN INDEX FUND, $55.67 is a buy. The ETF (New York symbol EWJ; buy or sell through brokers; us.ishares.com) tries to match the return of the Morgan Stanley Capital International (MSCI) Japan Index.

The fund’s top holdings include Toyota, 5.4%; Sony Corp., 3.3%; Keyence (sensors), 2.5%; Mitsubishi UFJ Financial, 2.1%; Recruit Holdings (human resources), 1.7%; Tokyo Electron (computer chips), 1.6%; KDDI (telecom), 1.6%; Softbank, 1.5%; and Shin Etsu Chemical, 1.5%....

1 min read

Pat McKeough

ETFs

Buy 4 of these 6 ETFs to tap global growth

All of the major global stock markets fell at the outbreak of COVID-19. But 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

Include a range of risk levels in your holdings

In theory, higher-risk stocks should deliver higher returns than lower-risk stocks—otherwise, why would any investor want to invest in high-risk stocks? But, the evidence to prove or disprove the theory is mixed. Some studies point to lower-risk stocks outperforming high-risk stocks over the long run while others point to specific periods when high-risk stocks performed spectacularly well.

There is an optimal time to invest in higher-risk stocks—when they are shunned by investors driving valuations to very low levels....

2 min read

Pat McKeough

ETFs

Infrastructure offers you lower-risk gains

Companies that own and operate unique infrastructure assets have characteristics, such as stable profits and cash flows, that can make them attractive. And investors looking for exposure to these assets have several publicly listed options available, including exchange-traded funds.

Notably, indexes that track the performance of listed infrastructure companies have performed better than the broad global equity markets over the long term and also had similar or lower volatility than the markets.

What are infrastructure assets?

Infrastructure provides the physical backbone that delivers essential services to the public....

3 min read

Pat McKeough

ETFs

Two new ETFs for Canadian investors

This month, we highlight two actively managed ETFs from Middlefield Group that were recently converted from closed-end funds.

MIDDLEFIELD INNOVATION DIVIDEND ETF $11.43 (Toronto symbol MINN) invests in companies that derive a major portion of their revenue from products or services related to major technological innovations.

The ETF is actively managed and discloses its full portfolio only every six months although the top holdings are available more frequently....

1 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.