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.
[text_ad]
Demand for renewable energy continues to grow, supported by government incentives and technological advances that lower costs. Still, the broad increase in power needs worldwide—along with relatively cheap oil and natural gas prices—should keep fossil fuels as the primary energy source for years to come.
There is, however, room for both renewable and fossil fuel providers to operate profitably.
Here are two ETFs that aim to benefit from growing investor interest in renewable energy (see the supplement on page 50 for more information).
INVESCO GLOBAL CLEAN ENERGY ETF $31.05 (New York symbol PBD; TSINetwork ETF Rating: Aggressive; Market cap: $425.4 million) invests in firms that focus on renewable sources of energy and technologies facilitating cleaner energy.
The ETF invests globally with the largest allocations to the U.S....
In the first quarter of 2020, discount online brokerages in Canada added 500,000 new accounts, growing at three times their normal pace....
SPACs are companies with no commercial operations that are established solely to raise capital from investors to acquire operating businesses....
For parents or grandparents who wish to save for their children’s future, there are few better ways than to invest in a diversified portfolio of high-quality, growing companies. Here are two ETFs that can help investors achieve that goal. And even better, these same ETFs are great portfolio additions at any age! Meanwhile, please also see the Supplement on page 49 for more information.
BMO S&P/TSX CAPPED COMPOSITE ETF $25.79 (Toronto symbol ZCN; TSINetwork ETF Rating: Aggressive; Market cap: $5.4 billion) invests in publicly listed Canadian companies.
The ETF tracks the S&P/TSX Capped Composite Index....
Right now, the SPDR S&P China ETF holds 820 stocks....
The fund’s largest holding is Taiwan Semiconductor at 20.3% of assets....
The best of these funds offer a diversified group of stocks while charging you low management fees....
The Bank of Canada cut its benchmark interest rate to 0.25% in March 2020. That was meant to support economic activity after COVID-19 hit. Whether the bank continues to hold that rate steady, cuts it further or raises it depends on Canada’s economic growth and employment levels.
Meanwhile, today’s low interest rates make bonds unattractive....
Utility stocks, or ETFs holding those shares, should be a part of most well-balanced investor portfolios....
However, well-diversified ETFs that offer exposure to commodity producers can help investors overcome the problems associated with direct investments in physical commodities or funds that track a single commodity.
Meanwhile, while a range of commodities, including copper, lumber, and palladium, have moved up strongly over the past year, it’s important to note that there are many different types of commodities, each with their own demand and supply dynamics....