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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

Here, rewards outweigh risks

ISHARES MSCI TAIWAN INDEX FUND, $64.14, 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 24.1% of assets. That’s high for one stock, but the company continues to be the world’s top maker of the most complex computer chips, with customers such as Apple. Other top stocks held by the ETF include Hon Hai (contract electronics maker) at 5.8%; and MediaTek (computer chips) at 4.2%.

1 min read

Pat McKeough

ETFs

Five of these ETFs are right for new buying

4 min read

Pat McKeough

ETFs

Here’s our Exchange-Traded Funds Portfolio for October 2025

Exchange-traded funds are set up to mirror the performance of a stock-market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings of that index or sub-index and will allow the fund to “track” its performance.

The MER (Management Expense Ratio) is generally much lower on traditional ETFs than on conventional mutual funds. That’s because most traditional ETFs take a much simpler approach to investing. Instead of actively managing clients’ investments, ETF providers invest so as to mirror the holdings and performance of a particular stock-market index.

1 min read

Pat McKeough

ETFs

Small-cap stocks may be undervalued

Small companies have generated attractive returns over the long run, although those returns have come with considerable volatility. Nevertheless, the outstanding returns generated by large U.S. companies over the past decade have diminished interest in smaller companies to such an extent that valuation discounts on small companies are now historically significant. A positive change in small company sentiment could drive higher returns on these stocks over time.

One popular method of dividing listed equities into groups is by market value. This normally results in three groups: large, medium, and small companies.

3 min read

Pat McKeough

ETFs

Diversify and add gains with value stocks

Value investing has long been regarded as the investment style that yields superior returns over the long term. However, for more than a decade, “growth investing” produced much better results. That may, however, be changing as the valuation gap between value stocks and growth stocks widens.

There is no universal definition of value investing. However, most value investors will focus on the price that they pay for a stock relative to the company’s estimated value, earnings or assets—aiming to get a substantial discount to the perceived value of the assets. Growth investors, on the other hand, are more interested in a company’s growth prospects and tend to pay premiums for those with strong growth potential.

Most ETF managers focusing on value investing have pre-determined criteria for selecting stocks. Here are examples of their strategies:

2 min read

Pat McKeough

ETFs

New ETFs for Canadian investors

This month, we highlight an interesting dividend-focused ETF from Franklin as well as a leveraged single-stock ETF from Purpose Investments.

1 min read

Pat McKeough

ETFs

The perils and pluses of trade with the U.S.

Switzerland is home to several globally competitive businesses, particularly in the fields of luxury goods, machinery, chocolates, and pharmaceutical products. These companies perform well in the export markets. But this is also one of the reasons why the country was recently slapped with one of the highest import duties by the U.S. administration—39%.

1 min read

Pat McKeough

ETFs

Switzerland should be able to withstand tariffs

The Swiss economy recovered well from the COVID-induced setback, with solid economic growth between 2021 and 2024. Inflation picked up after COVID, but has been quickly brought under control by the Swiss Central Bank.

Meanwhile, Switzerland has prospered with its export-oriented economy, but the country now faces a new challenge with very high tariffs being applied by the U.S.—a key export market for Swiss corporations.

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

5 min read

Pat McKeough

ETFs

Three small-cap ETFs to power your returns

Smaller firms can sometimes generate higher returns than their larger counterparts, but they are often riskier, less liquid, and may underperform for long periods. One way to offset some of the risk is to focus on ETFs that hold top-quality small-capitalization companies.

Here’s a look at three ETFs that meet that criteria. Meantime, please see the Supplement on page 100 for more on small caps in general.

4 min read

Pat McKeough

ETFs

This low-cost ETF focuses on stocks outside North America

TD International Equity Index ETF $26.42 (Toronto symbol TPE; TSINetwork ETF Rating: Conservative; Market cap: $3.35 billion) tracks the Solactive Developed Markets Ex North America Index. That index includes large and medium listed companies in developed markets. Stocks are weighted based on their market values.

The geographical distribution of the portfolio assets is mostly to European Union countries (52% of assets), Japan (25%), and countries in Asia (12%).

Financial Services make up 24% of the portfolio, followed by Consumer Goods (15%), Industrials (17%), Healthcare (9%), and Technology (8%).

1 min read

Pat McKeough

Testimonials

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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Subscriber since 1996. Inner Circle Member Since 2006
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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.