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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

Energy-focused Norway expands its horizons

An abundance of oil and natural gas resources has made Norway one of the wealthiest countries in the world. However, efforts are underway to diversify its economy beyond natural resources, and there are early signs of success.

Time will tell how complete or successful that transition is....

4 min read

Pat McKeough

ETFs

Big asset managers move away from coal

The Glasgow Financial Alliance for Net Zero was launched in April 2021 by Mark Carney, the UN Special Envoy for Climate Action and Finance.

The Alliance provides a forum for financial institutions to accelerate the transition to a global economy with net-zero carbon emissions....

1 min read

Pat McKeough

ETFs

Pass on this ETF

DIREXION DAILY AEROSPACE & DEFENSE BULL 3X SHARES ETF $19.11 (New York symbol DFEN) aims to generate returns of three times the daily performance of the Dow Jones U.S. Select Aerospace and Defense Index.

The fund started in May 2017 and has an asset base of $366.8 million; the MER is 0.95%.

The daily excess return of the ETF is created through the use of derivative instruments and swap arrangements....

1 min read

Pat McKeough

ETFs

Three clean energy ETFs for renewable gains

The demand for and supply of renewable energy is growing rapidly on support from government incentives and improving technologies that falling costs. Global efforts to lower carbon emissions will encourage further growth in the renewables industry.

Here are two ETFs that aim to benefit by investing in the renewable energy industry (see the supplement on page 10 for more information).

INVESCO GLOBAL CLEAN ENERGY ETF $28.90 (New York symbol PBD; TSINetwork ETF Rating: Aggressive; Market cap: $414.3 million) tracks the WilderHill New Energy Global Innovation Index....

4 min read

Pat McKeough

ETFs

Tap worldwide military spending

Global military spending reached almost $2 trillion U.S. in 2020, following seven years of uninterrupted expansion. Military spending might slow in the coming years as governments are forced to re-examine their military budgets in the wake of their massive stimulus spending to deal with COVID-19....

3 min read

Pat McKeough

ETFs

Hold this top REIT ETF

ISHARES S&P/TSX REIT INDEX ETF, $19.63, is a hold. The ETF (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) lets investors tap all 19 Canadian real estate investment trusts in the S&P/TSX REIT Index. Investors pay an MER of 0.61%, and the REIT fund gives you a 2.8% yield.

The ETF’s top holdings are Canadian Apart....

1 min read

Pat McKeough

ETFs

Here are two bond ETFs for stable income

The Bank of Canada cut its benchmark interest rate to 0.25% in early 2020. That was to support economic activity after COVID-19 hit. Whether the bank continues to hold that rate steady, cuts it again or, more likely, raises it depends on Canada’s economy and employment levels.

Meanwhile, today’s low interest rates make bonds unattractive....

2 min read

Pat McKeough

ETFs

India’s future is bright

ISHARES INDIA 50 ETF, $49.62, is a buy. The ETF (Nasdaq symbol INDY; buy or sell through brokers; us.ishares.com) tracks the Nifty 50 index—the 50 largest, most-liquid Indian securities. It began trading in November 2009.

The top holdings are Reliance Industries (conglomerate), 10.6%; HDFC Bank, 8.8%; Infosys (information technology), 8.5%; ICICI Bank, 6.7%; Housing Development Finance, 6.6%; Tata Consultancy (information tech), 4.9%; Kotak Mahindra Bank, 4.0%; and Larsen & Toubro (conglomerate), 3.8%....

1 min read

Pat McKeough

ETFs

Here are two top ETFs for your foreign 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

Top-quality telecoms represent good value

The traditional telecommunications service providers, such as Telus and BCE, are trading at substantially lower valuations than other “infrastructure” type companies. This is not only true for Canadian companies, but also for U.S. and other similar companies in Europe.

Infrastructure type companies such as telecommunications, pipelines, utilities, and railroad companies have delivered comparable financial results over the past five years—so this provides scant reason for the significant valuation differences....

2 min read

Pat McKeough

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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.