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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

These ETFs offer you top-quality stocks

The major Canadian and U.S. stock markets 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. We see ETFs as one way for you to profit from the continuing rise, while at the same time cutting your risk.

The best of these funds offer a diversified group of stocks and charge you low management fees....

4 min read

Pat McKeough

ETFs

Good time to buy Vietnam

VANECK VECTORS VIETNAM ETF, $21.49, is a buy for aggressive investors. This emerging-markets ETF (New York symbol VNM) lets you tap leading Vietnamese companies and foreign firms that get a significant share of their revenue from this Southeast Asian nation....

1 min read

Pat McKeough

ETFs

Renewable energy keeps building steam

Under the challenging pandemic circumstances of 2020, the world used 5% less energy than it did the year before. But this was the first annual decrease since 2009. It was also the largest decline in global energy consumption since the end of the Second World War.

While the Covid-19-induced lockdowns reduced global energy demand last year, the longer-term trend is likely up....

2 min read

Pat McKeough

ETFs

Outlook for military spending still bright

The massive financial cost of the Covid-19 pandemic may spur governments, in the absence of immediate military threats, to consider prioritizing other spending categories. However, increased military budgets and saber rattling from countries such as China and Russia will very likely keep Western military spending at high levels.

Military spending the highest on record

Global military spending in 2020 reached almost $2 trillion U.S., the highest level recorded at least since 1988 and the 6th consecutive annual increase (see graph below).

Over the past five years, the largest increases in spending came from developing countries such as China, Russia and India....

2 min read

Pat McKeough

ETFs

Here are new ETFs for Canadian investors

This month we look at two Canadian-listed ETFs that focus on global healthcare. The first is from CI Investments and holds a broad portfolio of healthcare providers. The second is from Horizons Asset Management, and it has a narrower mandate to select companies involved in the development of vaccines.

CI GLOBAL HEALTHCARE LEADERS ETF $19.86 (Neo Exchange symbol CHCL.B) invests in the 150 largest healthcare companies listed in developed markets.

The ETF tracks the Solactive Developed Markets Healthcare Index, which is a market-cap-weighted index....

1 min read

Pat McKeough

ETFs

Norway continues to invest for a non-fossil-fuel future

The current $1.4 trillion U.S. value of Norway’s sovereign wealth fund corresponds to around a whopping $254,000 per citizen. This sovereign fund is now the world’s largest wealth fund, followed by the China, Kuwait, and Abu Dhabi funds.

Although revenue from oil and gas production is transferred to the fund, these deposits account for less than half the value of the fund....

1 min read

Pat McKeough

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

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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.