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
Global powerhouse Adidas is a top German company
The iShares Germany ETF (see page 55) includes several companies that are among the global leaders in their respective industries. While these companies are generally as profitable as their U.S. counterparts, they typically trade on average at a substantial discount to earnings compared to their U.S....
1 min read
Pat McKeough
ETFs
Germany’s rebound will reward investors
The German economy was recovering in the first quarter of 2022. Then came the Russian invasion of Ukraine, and that has dampened the country’s recovery. The war exacerbates supply-chain disruptions, pushing up commodity prices and weighing on industrial production.


Still, Germany’s strong, ongoing government response to the pandemic sets its diversified, high value-added and export-oriented economy up for strong gains as global economies normalize.


Here is one ETF that provides exposure to the top public companies in Germany.


ISHARES MSCI GERMANY ETF $25.24 (New York symbol EWG; TSINetwork ETF Rating: Aggressive; Market cap: $1.7 billion) invests in publicly listed German companies.


Financial companies account for 20% of the fund’s assets, while Consumer Cyclicals (18%), Industrials (14%), Technology (14%), Healthcare (13%), and Basic Materials (10%), are other key segments.


The ETF holds a portfolio of 61 stocks; the top 10 make up 52% of its assets....
4 min read
Pat McKeough
ETFs
Dividend ETFs aim to provide solid income
Rising interest rates mean dividend-paying stocks must increasingly compete for investor interest in fixed-income investments. However, sustainable dividends still offer an attractive and growing income stream for investors.


Meanwhile, dividend-focused ETFs can—but not always—follow strategies that we feel set investors up for maximum long-term gains with the least risk....
4 min read
Pat McKeough
ETFs
Pass on this ETF
ROUNDHILL MEME ETF $6.02 (New York symbol MEME) invests in companies that attract considerable attention on social media sites like Reddit. They are called “meme stocks.” The fund started in December 2021 but has gathered only a small $1.2 million asset base....
1 min read
Pat McKeough
ETFs
Utilities offer you income and growth
Utilities could suffer more than other sectors as interest rates further rise. That’s because they have a lot of debt, and higher rates make it more expensive to raise money and refinance existing debt. As well, their shares, which typically offer high yields, compete with fixed-income instruments for investor interest.


Still, holding a stake in this sector is an important part of a well-balanced portfolio....
3 min read
Pat McKeough
ETFs
Six global markets: 4 ETF buys and 2 holds
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....
8 min read
Pat McKeough
ETFs
Look beyond commodities for food profits
Despite the significant long-term growth potential in food demand, the prices of agricultural commodities are volatile, and as a group performed poorly over the past 15 years. Still, many of the larger companies involved in the industry have done well and outperformed the S&P 500 since 2007.


Investors should note the high level of volatility and risk involved with both agriculture commodities and the shares of producers....
2 min read
Pat McKeough
ETFs
It’s time for gold miners to shine for investors
Physical gold, silver, and palladium have been stellar performers over the past two decades, even beating the S&P 500. In the case of silver and palladium, this came at the expense of higher volatility, but not so for gold, which had a similar level of risk to the S&P 500.


Gold producers have underperformed physical gold over the past two decades but this may change as producers tighten their capital spending and start to reward investors with better dividends and share buybacks.


Russia is a major producer of precious metals....
2 min read
Pat McKeough
ETFs
Two new ETFs for Canadian investors
This month we highlight two new ETFs that invest in futures contracts linked to carbon credits.


Government regulations aimed at reducing carbon emissions include carbon credit trading systems. The systems effectively place a price on carbon emissions to compensate for their climate-change effects....
1 min read
Pat McKeough
ETFs
ETF’s top holding supplies key commodities
Sociedad Quimica Y Minera(SQM) is currently the largest holding in the iShares MSCI Chile ETF, making up a big 26% of its total assets. The company is a major global producer of lithium, iodine, and fertilizers.


SQM’s share price tends to follow a cyclical pattern over time as the prices of its main products fluctuate....
1 min read
Pat McKeough
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