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:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

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ETFs Library Archives
ETFs
Australia’s outlook is strong despite Chinese tensions
China is the largest destination for Australian exports, taking 40% of all exported goods including iron ore, coal, natural gas, food, and precious metals. Australia supplies over 60% of China’s iron ore imports, almost half its liquefied natural gas imports, and around 40% of coal imports.


Relations between the two countries began to deteriorate in 2017 with Australia speaking out about China’s actions in the South China Sea....
1 min read
Pat McKeough
ETFs
This Australia ETF taps a bright future
Australia’s economy looks set for steady expansion this year. Pent-up spending and faster wage growth should spur household spending and domestic consumption. Meanwhile, the country’s resource-heavy export sector will benefit from sustained global demand for commodities and the reopening of borders....
4 min read
Pat McKeough
ETFs
Three riskier ETFs with recovery potential
The recent market downturn has been especially hard on riskier stocks—and all three of these ETFs are down considerably from their 2021 highs. But the best of the stocks these ETFs hold are at the forefront of innovative industries or segments that still have considerable growth prospects....
4 min read
Pat McKeough
ETFs
Pass on this ETF
B.A.D. ETF $12.04 (New York symbol BAD) invests globally in listed companies with exposure to betting, alcohol, and drugs (especially cannabis). The ETF also promotes itself as non-ESG (environmental, social and governance) and non-technology focused.


The fund launched on December 21, 2021, and charges investors a high management fee of 0.75%.


The ETF aims to track the EQM BAD Index....
1 min read
Pat McKeough
ETFs
Infrastructure ETFs offer stability
Governments around the world know the benefits that flow from upgrading infrastructure. However, stretched budgets because of the pandemic—as well as a reluctance to raise taxes—have limited the ability of governments to initiate new projects or to even expand existing ones....
3 min read
Pat McKeough
ETFs
Taiwan fund is still a buy

ISHARES MSCI TAIWAN INDEX FUND, $51.78, is a buy for aggressive investors. The ETF (New York symbol EWT; buy or sell through brokers) gives you direct exposure to some of the top public companies of this East Asian powerhouse economy.


The fund’s largest holding is Taiwan Semiconductor at 22.0% of assets....
1 min read
Pat McKeough
ETFs
These ETFs let you tap the major indexes
The major Canadian and U.S. stock markets, while subject to volatility, have moved back up since their initial COVID-19 drop. Nonetheless, we think that if you can afford to stay in the market for several years or longer, now is still a good time for new buying....
4 min read
Pat McKeough
ETFs
Buy Vietnam’s best
VANECK VECTORS VIETNAM ETF, $14.82, is a buy for aggressive investors. This emerging-markets ETF (New York symbol VNM) lets you tap leading Vietnamese companies as well as foreign firms that get a significant share of their revenue from this Southeast Asian nation....
1 min read
Pat McKeough
ETFs
Holding cash can erode overall returns
Cash has been a poor performer for the past 20 years, not even keeping pace with the low rate of inflation. Almost every asset class has done much better. But some cash can be useful when equity markets turn down—it can provide investors the opportunity to buy stocks at lower prices and it offers a buffer for investors that regularly extract money from their portfolios to cover expenses.


Lastly, cash returns may rise as central bankers ramp up their fight against inflation....
3 min read
Pat McKeough
ETFs
Key ways investors seek to lower volatility
Investors aiming to beat inflation over time—without taking undue risk—have a variety of options presented by exchange-traded funds. While, looking back is of limited use going forward, here are some of the results from academic studies of the volatility, downside risk, and total return of a select group of ETFs over the past 5 years:



  • Balanced ETFs that are diversified across asset classes, succeeded in lowering portfolio volatility and downside risk but delivered a much lower return than the broader market.
  • Equity ETFs designed to lower portfolio volatility by focusing on less volatile stocks delivered lower volatility but their returns lagged the market—although, on average, by a small margin....
3 min read
Pat McKeough
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