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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

China leads the recovery

SPDR S&P CHINA ETF $127.30 (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 734 stocks....

1 min read

Pat McKeough

ETFs

Tap into Taiwan’s future

ISHARES MSCI TAIWAN INDEX FUND, $52.54, 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 22.1% of assets....

1 min read

Pat McKeough

ETFs

Here’s our view on six popular ETFs

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 to buy. We see ETFs as one way for you to profit from that rise, while cutting your risk.

The best of these funds offer a diversified group of stocks while charging you low management fees....

4 min read

Pat McKeough

ETFs

Here’s a low-fee way to invest in bonds

The Bank of Canada cut its benchmark interest rate to 0.25% from 1.25% in March 2020. The move was meant to spur the economy after COVID-19 hit. Whether the bank holds that rate steady, or cuts it even further, depends on the country’s economic growth and unemployment levels.

Meanwhile, even for our conservative investors, we caution against investing in bonds....

2 min read

Pat McKeough

ETFs

Buy the top solar stocks

INVESCO SOLAR ETF, $99.27, 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 11.2%; SolarEdge Technologies (Israel: solar-power batteries), 8.8%; Xinyi Solar (China: solar panels), 7.4%; Sunrun Inc....

1 min read

Pat McKeough

ETFs

Now a buy for copper gains

GLOBAL X COPPER MINERS ETF, $27.79, is a hold. 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....

1 min read

Pat McKeough

ETFs

Buy them to tap precious-metal demand

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.

The extra burst reflects investor fears about many things, including stock market volatility because of COVID-19 and the length and depth of the resulting economic slowdown.

For many investors, gold and silver represents a “safe harbour” in turbulent times....

2 min read

Pat McKeough

ETFs

Buy into Vietnam’s pluses

VANECK VECTORS VIETNAM ETF, $16.34, 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 Vingroup (conglomerate), 9.4%; Vietnam Dairy, 8.4%; Vinhomes (real estate), 6.8%; No Va Land Investment, 6.4%; Hoa Phat Group (iron and steel), 6.3%; the Bank for Foreign Trade of Vietnam, 6.1%....

1 min read

Pat McKeough

ETFs

Two top ETFs for your international buying

If you’re looking for an ETF with quality holdings and exceptionally low fees, then Pennsylvania-based Vanguard Group offers you strong options. Vanguard is one of the world’s largest investment management companies. In all, it administers over $6.2 trillion U.S....

2 min read

Pat McKeough

ETFs

Boost your gains by keeping your fees low

High fees, often not directly visible to investors, can substantially lower investment returns over time. It is therefore key that investors carefully consider fees before deciding to buy an ETF or mutual fund.

The damaging effect of high fees

The following example demonstrates the outcome of a $100,000 investment in two identical vehicles that both produce an annual return of 10%....

3 min read

Scott Clayton

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Subscriber since 1996. Inner Circle Member Since 2006
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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.