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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 are two new ETFs for Canadians

This month we consider a unique ETF that buys carbon credits to offset the emissions of its holdings. Meanwhile, we look at a new Canadian energy ETF that has energy stock booster Eric Nuttall as a manager.

The Evolve S&P/TSX 60 CleanBeta FUND $21.09 (Toronto symbol SIXT) invests in the companies that are the constituents of the S&P/TSX 60 index.

What makes this fund different from other ETFs that track the same index is the objective to neutralize the carbon emissions of the fund holdings....

1 min read

Pat McKeough

ETFs

Tourism will help drive Mexico’s economic recovery

Tourism is an important economic industry in Mexico: pre-pandemic the segment directly accounted for 9% of GDP, and 6% of full-time paid employment.

The country is also a prominent global tourist destination, receiving 45 million international visitors in 2019, ranking 6th globally on the number of international visitors....

1 min read

Pat McKeough

ETFs

Mexico looks to recover along with the U.S.

The Mexican economy was hit by the pandemic, especially from a disastrous drop in international tourists as COVID-19 kept visitors at home. But the economy is now recovering as the U.S. rebounds. In fact, Mexican stocks have largely bounced back to pre-pandemic levels.

Here’s a look at an ETF that provides exposure to the top Mexican publicly listed companies.

ISHARES MSCI MEXICO ETF $47.88 (Nasdaq symbol EWW; TSINetwork ETF Rating: Aggressive; Market cap: $1.2 billion) tracks the performance of the largest publicly listed Mexican companies.

Consumer Defensive stocks account for 31% of its assets, while Telecommunication Services (22%), Financial Services (15%), Basic Materials (12%), and Industrials (10%) are other key segments.

The ETF holds a portfolio of 47 stocks; the top 10 holdings make up a large 64% of the portfolio.

They are America Movil SAB (Communications, 15.5%), Grupo Financiero Banorte (Financials, 9.7%), Fomento Economico Mexicano (Consumer Defensive, 9.5%), Walmart de Mexico (Consumer Defensive, 9.5%), Grupo Televisa (Consumer Cyclical, 4.2%), Cemex SAB (Basic Materials, 4.0%), Grupo Mexico (Basic Materials, 3.8%), Grupo Aeroportuario del Pacifico (Industrials, 2.8%), Grupo Aeroportuario del Sureste (Industrials, 2.5%), and Fibra Uno Administracion REIT (Real Estate, 2.3%).

The ETF’s assets have a heavy concentration in the top four holdings....

4 min read

Pat McKeough

ETFs

Small-cap ETFs for Canadian investors

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....

5 min read

Pat McKeough

ETFs

U.S. regulators have still not approved any crypto ETFs

Regulators appeared to be in no hurry to approve ETFs that invest in cryptocurrencies. Their main concerns hinged on the risks that investor assets could not be kept safely in custody, a lack of transparency, significant price volatility and possible market price manipulation of cryptocurrencies such as bitcoin and ether....

1 min read

Pat McKeough

ETFs

Pass on this ETF

3D PRINTING ETF $37.34 (New York symbol PRNT) invests in publicly listed companies involved in the production and distribution of hardware, software and other materials related to 3-dimensional printing.

The fund aims to track the Total 3D-Printing Index.

The manager of the ETF, ARK Invest, believes that there is room for considerable growth in the 3D printing industry, with commercial applications ranging from shoe making, aviation and medical devices....

1 min read

Pat McKeough

ETFs

Three bitcoin ETFs with risk ahead

Bitcoin and other cryptocurrency assets have attracted considerable investor interest over the past few years. And, needless to say, ETF providers have jumped on this trend to provide investors with an opportunity to buy bitcoin—for a fee.

We think buying bitcoin as well as other cryptocurrencies is highly risky and has a good chance of handing you a big loss....

3 min read

Pat McKeough

ETFs

China comes out of COVID

SPDR S&P CHINA ETF, $126.10 (New York Exchange symbol GXC; buy or sell through brokers; www.spdrs.com) tracks the S&P China BMI Index. This includes all publicly traded Chinese stocks available to foreign investors.

Right now, the SPDR S&P China ETF holds 820 stocks....

1 min read

Pat McKeough

ETFs

Tap Taiwan’s top stocks

ISHARES MSCI TAIWAN INDEX FUND, $64.50, 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 21.4% of assets....

1 min read

Pat McKeough

ETFs

Here are 5 ETFs to buy—and one to switch

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

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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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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.