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.

[text_ad]

Read More Close

ETFs Library Archives

ETFs

Two new bitcoin ETFs for Canadian investors

This month we look at two new bitcoin ETFs—one from Purpose Investment and the other from Evolve Funds. Due to U.S. regulatory restrictions, these Canadian-listed ETFs are among the first globally that directly hold bitcoin.

PURPOSE BITCOIN ETF $11.80 (Toronto symbol BTCC.B or BTCC.U) invests in the digital currency bitcoin....

1 min read

Pat McKeough

ETFs

Commodities shine in February

February ended the same way as January—with U.S. and global equities under pressure as investors became increasingly concerned about the prospect of rising inflation spurring higher interest rates. However, most commodities had an excellent month while real estate also continued to recover.

The iShares MSCI Canada Equity ETF (EWC), supported by higher commodity prices, gained 1.7%....

1 min read

Pat McKeough

ETFs

ETF investing: Watch for these pitfalls

The best exchange-traded funds offer investors well-diversified portfolios of high-quality stocks with low fees. Still, investors need to be aware of some potential pitfalls with ETF investing.

First, investors need to be sure they know all the ins and outs of what they are investing in....

1 min read

Pat McKeough

ETFs

This ETF taps South Korea’s COVID recovery

South Korea has been one of the most impressive performers among emerging-market economies over the past 50 years. That’s especially so over the last year.

The country has managed the COVID-19 pandemic well, with the government implementing massive stimulus programs to boost the economy....

5 min read

Pat McKeough

ETFs

Retail investors are driving South Korea’s stock market

The only stock exchange in South Korea, the Korea Exchange, is home to over 2,000 companies, with a combined market value of $1.5 trillion; this ranks the exchange among the top 15 in the world.

The market is also very liquid with $1.9 trillion in equities traded in 2019....

1 min read

Pat McKeough

ETFs

Investing in foreign markets can bring unexpected costs

Many investors prefer to invest in securities listed on their home markets. Familiarity with the domestic environment and companies—and a lack of familiarity with foreign markets—are big reasons.

Canadian investors may also feel uncomfortable taking on the currency risk that comes with holding foreign securities—especially if they think the direction of the foreign currency is downward....

1 min read

Pat McKeough

ETFs

Here are 3 ways to gain from commodities

Commodity production is capital intensive with long development times. Producers face considerable costs to establish or replace mines, oilfields, and so on, or build processing, storage and transportation facilities. This means that the selling prices of their products can vary significantly from the time of their initial investment decisions....

4 min read

Pat McKeough

ETFs

Pass on this ETF: BMO COVERED CALL UTILITIES ETF

BMO COVERED CALL UTILITIES ETF $12.37 (Toronto symbol ZWU) invests in Canadian and U.S. utility, pipeline, and telecommunications companies with what it sees as steady revenue streams; it also sells call options to enhance the yield on the portfolio.

The ETF, launched in October 2010, currently holds $1.0 billion of assets, and charges a somewhat high MER of 0.65%.

The fund has a very high 8.2% yield....

1 min read

Pat McKeough

ETFs

Canadian sector funds: 1 buy, 1 hold

Last month we recommended some international ETFs—but at the same time, we noted that Canadian investors often have a bias for investing in their home markets. And we agree with that bias—we still recommend that most Canadians hold the bulk of their portfolios in Canadian stocks, or ETFs that hold those stocks.

Here we highlight two ETFs that invest in top Canadian stocks....

3 min read

Pat McKeough

ETFs

This ETF soars with copper

GLOBAL X COPPER MINERS ETF, $38.01, is a buy. The ETF (New York symbol COPX; buy or sell through brokers; www.globalxfunds.com) lets you track the Solactive Global Copper Miners Index, with 30 global mining and exploration firms. It started up in April 2010.

Canadian firms make up 32.5% of the ETF’s holdings....

1 min read

Pat McKeough

Testimonials

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.

Chuck Chakrapani, PhD
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.

Jonathan Chevreau
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

John Sartz
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.

Chuck J.
Subscriber since 1996. Inner Circle Member Since 2006
The newsletters I receive in Inner Circle Pro are fantastic! I have been following Pat’s advice for years and everything he has said has been amazing. His commentaries are brilliant, insightful, educational, rational and balanced. My returns are almost double the TSE and I have referred many of my friends who have switched over to your services.

Walter H.
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.