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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ISHARES MSCI AUSTRALIA ETF $20.31 (New York symbol EWA; TSI Network ETF Rating: Aggressive; Market cap: $1.1 billion) gives you exposure to 69 of the country’s major stocks.
Financial Services account for 32.5% of the fund’s assets, while Mining (19.1%), Healthcare (14.8%), Consumer Non-Cyclicals (6.5%), Consumer Cyclicals (6.0%), and Industrials (5.5%) are other key segments.
The ETF holds a portfolio of 69 stocks....
Leveraged ETFs use a combination of derivatives and debt to double or triple any value gains for the asset or index they track.
Here is one example: Horizons offers the BETAPRO GOLD BULLION 2X DAILY BULL ETF $12.18 (Toronto symbol HBU), which aims to provide 2 times the daily percentage change in the near-term futures price of gold....
Utilities as a sector will benefit from the lower rates....
We expect gold-loving markets in Asia and other emerging markets to rebound after the coronavirus. That should further spur gold purchases, taking gold stocks even higher....
Most precious-metal stocks dropped, along with stock markets, in March 2020. They then quickly reversed that trend to soar for investors.
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 these turbulent times....
GLOBAL X COPPER MINERS ETF $16.78, 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, which includes 27 global mining and exploration firms....
All of the major global stock markets are down in the wake of COVID-19’s spread. But we think the worst is over for many stocks, and one way to profit, while at the same time cutting your risk, is to invest in ETFs.
Here’s a look at two international funds that we believe are well-suited for your new buying.
ISHARES MSCI JAPAN INDEX FUND $56.89 (New York symbol EWJ; buy or sell through brokers; us.ishares.com) is an ETF that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan Index.
The fund’s top holdings include Toyota, 4.0%; Sony Corp., 2.4%; Keyence (sensors), 2.2%; Softbank, 2.1%; Takeda Pharma, 1.8%; Daiichi Sankyo (pharmaceuticals), 1.6%; Mitsubishi UFJ Financial, 1.5%; KDDI (telecom), 1.4%; Nintendo, 1.3%; and Recruit Holdings (human resources), 1.3%....
If you’re looking for an ETF with top 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....
The table below indicates the current income yields available on those investments, plus other asset classes—as represented by the ETFs highlighted below....
Stocks beat bonds over time
We’ll first take a look at readily available data from U.S....