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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

Telecommunications ETFs aim to tap 5G

Telecommunications form an integral part of economic infrastructure. At the same time, strict licensing standards and high capital requirements result in considerable barriers to entry for any firms trying to enter the industry. That helps explain why top telecommunication companies—plus the firms that supply their equipment or use their services for streaming and so on—continue to offer attractive prospects in growing markets.

Below we take a look at two ETFs that hold companies involved in various aspects of the telecommunications industry....

3 min read

Pat McKeough

ETFs

Great way to buy solar

INVESCO SOLAR ETF, $84.33, is a buy for aggressive investors. The ETF (New York symbol TAN; buy or sell through brokers) tracks solar-related companies (including technology firms and utilities) listed on global exchanges.

The fund’s top holdings are Enphase Energy (U.S.; home solar systems) at 12.7%; First Solar (China; solar panels), 9.3%; SolarEdge Technologies (Israel; solar-power batteries), 8.1%; Sunrun (U.S.; solar panels), 5.4%; GCL Technology (China; polysilicon), 4.9%; and Xinyi Solar (China; solar panels), 4.5%. The ETF charges a reasonable MER of 0.66%.

Renewable stocks have drifted down lately, after big runups last year on President Biden’s support for sun, wind and hydro power—plus strong investor interest in stocks that will gain from the push for global decarbonization....

1 min read

Pat McKeough

ETFs

Two Vanguard ETFs to lift your gains

Generally speaking, Canadians are blocked from buying mutual funds that are registered in the U.S. unless those funds are also registered with provincial securities commissions. (Moreover, some Canadian mutual funds are only available in a limited number of provinces.)

Investors in this country can, however, buy exchange-traded funds, or ETFs, listed on U.S....

2 min read

Pat McKeough

ETFs

Not all high yield ETFs are created equal

High yields, especially in what is still a relatively low interest-rate environment, have lots of appeal for many income investors. But ETF investors should look beyond the historical distribution yield for any danger signs.

The managers of ETFs use various strategies to generate high yields for their unitholders....

3 min read

Pat McKeough

ETFs

Rising interest rates impact real estate

Apart from the overall market decline, higher interest rates in Canada and the U.S. are the main reason for weakness in the shares of real-estate firms and REITs. So far this year, ETFs holding U.S. and Canadian REIT have lost around 20% of their value.

However, the outlook for almost all segments of the real estate market are now quite positive....

3 min read

Pat McKeough

ETFs

We see one of these new ETFs as a buy

This month we highlight both a copper exchange traded fund from Horizons and a high-income ETF from Harvest Portfolio Group.

HORIZONS COPPER PRODUCERS INDEX ETF $20.20 (Toronto symbol COPP) aims to track the Solactive North American Listed Copper Producers Index....

1 min read

Pat McKeough

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

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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.

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Investors Association of Canada
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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.