ETFs - The Successful Investor Inc

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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How we judge investment quality

The essence of investment quality is a company’s ability to survive a business setback and go on to still greater success when conditions improve....

6 min read

Pat McKeough

ETFs

Here’s three new ETFs directed at Canadians

This month we look at three new ETFs. The first is an actively managed ETF that invests in “frontier” technology companies; they’re selected by a manager with roots in venture capital. The next two funds are ETFs where their managers use a “black box” to pick dividend-paying companies.

INNOVATOR LOUP FRONTIER TECH ETF $54.32 (New York symbol LOUP) is an ETF invested in technology companies that its managers believe will drive the next wave of technological innovation.

Loup Ventures, a venture capital firm with two decades of experience in technology, is the ETF’s advisor....

1 min read

Pat McKeough

ETFs

A closer look at three top global players from Denmark

Novo Nordisk (New York symbol NVO) started up 85 years ago, and is considered a pioneer and leader in diabetes care.

The company claims a 28% share of the $50 billion global diabetes treatment market and half of the $20 billion insulin market....

1 min read

Pat McKeough

ETFs

Tap Denmark’s industry-leading firms

Stability and a well-educated workforce are two key traits of the Danish economy. The Scandinavian country is also home to leading global companies in the fields of healthcare and green energy. Meanwhile, the economy has coped relatively well with the pandemic and should regain more normal output sometime in late 2021.

Here is an ETF for investors seeking low-fee exposure to Denmark’s top public companies.

ISHARES MSCI DENMARK ETF $97.88 (New York symbol EDEN; TSINetwork ETF Rating: Aggressive; Market cap: $167.1 million) tracks the performance of the largest publicly listed companies in Denmark.

Healthcare companies account for 39.7% of its assets, while Industrials (26.0%), Financial Services (7.8%), Utilities (7.0%), and Consumer Defensive (6.5%) are other key segments.

The ETF holds a portfolio of 46 stocks; the top 10 make up 67% of its assets....

4 min read

Pat McKeough

ETFs

ETFs keep attracting record inflows

In 2020, ETFs continued to attract new money at a rapid pace, with almost $33 billion in inflows through the end of November. That should lead to a record year of inflows, beating the previous record of $30 billion set in 2019.

Canada now has 39 ETF sponsors who manage 846 distinct ETFs with $250 billion in assets....

1 min read

Pat McKeough

ETFs

These past picks are still going strong

In our February 2020 issue, we recommended a number of ETFs for gains ahead—including our #1 ETF Pick for 2020.

Little did investors know at the time how tumultuous the year would turn out. Economies all over the world suffered under the strain of government-enforced lockdowns....

1 min read

Pat McKeough

ETFs

Here’s your look at three more ETFs for 2021

Vaccination plans in the U.S. and globally have spurred a more positive economic outlook for 2021. Still, there are risks on the horizon, like potential delays in the rollout of those vaccines as well as political and trade-war tensions.

Here’s a look at three popular ETFs and whether we think they are buys for investors in 2021.

VANGUARD U.S....

4 min read

Pat McKeough

ETFs

Your #1 ETF for 2021: SPDR S&P 500 ETF

SPDR S&P 500 ETF $379.79 (New York symbol SPY) lets you hold the top stocks of the S&P 500 Index; they’re the major U.S. companies based on market cap, liquidity and industry.

The fund’s highest-weighted stocks offer a lot of appeal for investors: Apple, 6.5% of assets; Microsoft, 5.2%; Amazon.com, 4.2%; Alphabet, 3.3%; Tesla, 2.1%; Facebook, 2.0%; Berkshire Hathaway, 1.4%; Johnson & Johnson, 1.3%; and JP Morgan Chase, 1.3%.

The ETF’s distribution also offers you a solid 1.5% yield, while the fund charges you a very low 0.095% MER.

Going forward, investors should directly gain from U.S....

1 min read

Pat McKeough

ETFs

These ETFs aim to spur 2021 gains

COVID-19 pushed down the prices of most stocks and ETFs in early 2020. Some, like airlines, hotels, casinos and many restaurant stocks, are still down. Others have recovered to their old highs but may have trouble moving higher until the global economy returns to normal.

Meanwhile, some stocks and ETFs have taken off since mid-2020 and are now setting new all-time highs....

3 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
The older I get the better dividends look. For retirees and would-be retirees who want to sleep at night, I can’t think of a better source of information on reliable growing dividend income than Pat McKeough’s newsletter, Dividend Advisor.

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Financial Post Columnist
As a manager of more than $500 million in mutual funds, I have access to the best brokerage research available in this country. But I still take time to read Pat McKeough’s premium newsletters

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I appreciate the 25 years of above market returns I received by following your advice. at least 95% of my investment decisions were based on TSI recommendations.

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Subscriber since 1996. Inner Circle Member Since 2006
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Inner Circle Pro subscriber

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.