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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

Precious metals offer you a bright future

Most precious-metal stocks dropped, along with stock markets, in March 2020. They then quickly reversed that trend to soar for investors. In fact, In August 2020, gold jumped to over $2,000 U.S. an ounce for the first time ever. Gold stocks also jumped.

Gold prices have since drifted down to $1,711 as investor fears about many things have lessened....

2 min read

Pat McKeough

ETFs

Don’t overlook this ETF.

INVESCO SOLAR ETF, $94.50, is a buy for aggressive investors. The ETF (New York symbol TAN; buy or sell through brokers) tracks solar-related companies (including technology firms and utilities) listed on global exchanges.

The fund’s top holdings are Enphase Energy (U.S.: home solar systems) at 11.1%; GCL-Poly Energy (China: solar panels), 8.4%; Daqo New Energy (China: silicon), 8.2%; SolarEdge Technologies (Israel: solar-power batteries), 8.1%; and Sunrun Inc....

1 min read

Pat McKeough

ETFs

Tap into Vietnam’s future

VANECK VECTORS VIETNAM ETF, $17.60, 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.

Your top holdings through this ETF are Vinhomes (real estate), 7.5%; No Va Land Investment, 7.5%; Vingroup (conglomerate), 7.3%; Vietnam Dairy, 7.3%; and the Bank for Foreign Trade of Vietnam, 6.1%....

1 min read

Pat McKeough

ETFs

These Vanguard funds are top ETF buys

Generally speaking, Canadians are blocked from buying mutual funds that are registered in the U.S. unless those funds are also registered with provincial securities commissions. (Moreover, some Canadian mutual funds are only available in a limited number of provinces.)

Investors in this country can, however, buy exchange-traded funds, ETFs, listed on U.S....

2 min read

Pat McKeough

ETFs

Know your financial stocks

One of the key tenets of our Successful Investor philosophy is to diversify by spreading your money out across most if not all of the five main economic sectors: Manufacturing & Industry, Resources & Commodities, Consumer, Finance, and Utilities.

And as part of your holdings, we continue to recommend that most Canadian investors hold at least two or three of Canada’s Big Five banks (TD Bank, Bank of Nova Scotia, CIBC, Bank of Montreal and Royal Bank)....

2 min read

Pat McKeough

ETFs

2021 is off to a mixed start

The Vanguard Total World Stocks ETF (VT) gained 0.1% in January 2021. The Vanguard S&P 500 ETF (VOO) lost 0.3%, and the iShares MSCI Canada Equity ETF (EWC) lost 1.1%. The iShares Core EAFE ETF (IEFA), which excludes U.S....

1 min read

Pat McKeough

ETFs

There are ETF opportunities beyond Canada

Canadian investors, not unlike investors from most other countries, often have a bias for investing in their home markets. Familiarity with the domestic environment and companies—and a lack of familiarity with foreign markets—are big reasons.

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.

One good reason for that is Canadian taxpayers who hold Canadian dividend stocks get a special bonus....

2 min read

Pat McKeough

ETFs

New ETFs for Canadian investors

This month we look at two new ETFs. The first of those funds invests in companies involved in the management of private equity. The second is an actively managed ETF concentrating on companies that its managers believe will benefit from a rise in inflation.

NBI GLOBAL PRIVATE EQUITY ETF $32.79 (Toronto symbol NGPE) lets Canadians invest globally in publicly listed companies involved in private equity....

1 min read

Pat McKeough

ETFs

Brexit reduces uncertainty for investors in the U.K.

Investors don’t typically like uncertainty, and the prolonged negotiations about the future business relationship between the U.K. and the EU was a main contributor to weakness in both the country’s stock market and its currency over the last few years.

Between June 23, 2016—the day of the referendum—and December 24, 2020, when agreement on the future business relationship was reached, the main British stock market index declined by 11%....

1 min read

Pat McKeough

ETFs

The U.K. is looking beyond Brexit and COVID

Last year was a difficult one for the U.K. and its economy due the coronavirus pandemic. But the outlook for 2021 is much more positive.

The rebound will come from the easing of COVID-19 restrictions as the pandemic slows and from the government’s extensive stimulus spending....

4 min read

Pat McKeough

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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.