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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

Colombia’s coffee trade is a plus

Colombian coffee is often regarded as among the highest quality in the world. The country has traditionally grown Arabica beans and its unique geography makes it perfectly suited for producing a delicious, high-quality brew.

Colombia’s excellent growing conditions have been paired with an aggressive marketing campaign by the National Federation of Coffee Growers....

1 min read

Pat McKeough

ETFs

Colombia’s future holds promise but also risks

Despite its decades-long image as a violent, drug-cartel-controlled country, Colombia entered a new phase of stability in 2016 when the government signed a peace accord with the FARC guerilla group.

Since then, the Colombian economy has fared relatively well compared to its peers in South America....

5 min read

Pat McKeough

ETFs

What to know about trading liquidity

High levels of trading between buyers and sellers of ETF units is normally enough to ensure that the bid-offer spreads remain small and that the market price of the units trade close to the value of the underlying assets. However, there is more to ETF liquidity.

Secondary market trading—which happens on the stock exchanges between sellers and buyers of the existing ETF units—depends on how many ETF units have been issued and the interest of buyers and sellers in trading....

1 min read

Pat McKeough

ETFs

Mid-cap ETFs can lift your portfolio gains

Many investors overlook mid-cap stocks, thinking that a combination of large- and small-cap stocks will provide their portfolios with all the diversification they really need. However, as a group, U.S. mid-cap stocks have often performed better than large caps and are generally less risky than small caps....

4 min read

Pat McKeough

ETFs

Fund providers are applying AI to a rising number of ETFs

Active ETF portfolio managers have developed a wide range of tools to improve their chances of beating the market. In some cases, the managers have decided that computers have a better chance of integrating information to consistently make good investment decisions....

1 min read

Pat McKeough

ETFs

Pass on this ETF

GLOBAL X SUPERDIVIDEND ETF $13.24 (New York symbol SDIV) invests in 100 of the highest-yielding stocks worldwide.

Stocks in the portfolio are equally weighted to reduce the risk associated with a high exposure to individual companies....

1 min read

Pat McKeough

ETFs

These ETFs aim for top-quality holdings

One of the best methods of building wealth over time is to zero in on the shares of quality companies with a consistent history of sales and earnings (or the ETFs that hold them). Solid balance sheets and a strong hold on a growing clientele are also pluses.

Here are two ETFs that aim to offer investors portfolios of companies selected on the basis of their quality characteristics....

3 min read

Pat McKeough

ETFs

Taiwan is a timely buy

ISHARES MSCI TAIWAN INDEX FUND, $61.84, 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 22.8% of assets....

1 min read

Pat McKeough

ETFs

We recommend just five of these six ETFs

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....

4 min read

Pat McKeough

ETFs

Profit from Vietnam’s rise

VANECK VECTORS VIETNAM ETF, $19.07, 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

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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

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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.