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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

Use these megatrends to build gains

“Megatrends” are societal shifts with significant, long-term implications for the economy and the stock market. Once in full swing, these trends can be easy to track, although it is more difficult to pick out the companies that will most benefit from them. This month we look at ETFs with holdings designed to let investors tap two such trends: We start with the aging of the global population (below) and continue with urbanization.

As well, you’ll benefit from our supplements on pages 39 and 40....

3 min read

Pat McKeough

ETFs

Copper slows with China

GLOBAL X COPPER MINERS ETF $15.98, 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....

1 min read

Pat McKeough

ETFs

These ETFs offer you precious-metal gains

Investors saw gold jump to almost $1,700 U.S. an ounce in February 2020 for the first time in seven years. The leap was mostly due to uncertainty about how the coronavirus will impact the global economy and, in turn, stock prices. Gold has since dropped back below $1,653.

A health issue like the coronavirus sparks investor worries, due to the risk of economic losses....

2 min read

Pat McKeough

ETFs

Too soon for China buying

ISHARES CHINA LARGE-CAP ETF, $41.26, is a hold for safety-conscious investors. The ETF (New York symbol FXI; buy or sell through brokers) tracks the 50 largest, most-liquid Chinese stocks. It started up October 4, 2004, and investors are charged a high 0.74% MER....

1 min read

Pat McKeough

ETFs

These ETFs let you tap international growth

If you’re looking for an ETF with top holdings combined with 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 for investors over $5.3 trillion U.S....

2 min read

Pat McKeough

ETFs

Value stocks can still spur investors gains

For our subscribers, we’ve long highlighted the benefits of “value investing.” As an investment style it has, over time, performed better than the overall market. The MSCI World Value Index, for example, has outperformed the MSCI World Growth Index by 2.1% per year since 1975 (the start of both indexes)....

2 min read

Pat McKeough

ETFs

Fossil fuels will challenge investor returns

Companies involved in the production of carbon-based energy have generally underperformed for investors over the past several years (see table at right).

Volatile commodity prices are nothing new to the industry, with both oil and natural gas prices now at about half the highs reached in mid-2014....

2 min read

Pat McKeough

ETFs

Volatility mars your January returns

The year started with a bang as market volatility spiked. The killing of Iranian General Qassem Suleimani by U.S. forces, the rocket attack on a U.S. military camp in Iraq, the signing of a Phase 1 trade deal between the U.S. and China, and the rapid spread of a coronavirus originating from China’s Wuhan all contributed to the increase in volatility.

The Chinese stock market, commodity producers, shipping companies, airlines, and luxury goods sellers all came under heavy pressure as investors started to factor in the negative impact on companies affected by the virus outbreak in China....

1 min read

Pat McKeough

ETFs

Here’s a look at new ETFs for investors

This month we consider two new ETFs. The first offers you an actively managed portfolio of global dividend-payers; the second provides investors with some upside exposure to the S&P 500 along with some risk protection.

TD Bank launched the TD ACTIVE GLOBAL ENHANCED DIVIDEND ETF (Toronto symbol TGED) in May 2019.

This ETF invests in dividend-paying stocks from companies in developed markets around the world....

1 min read

Pat McKeough

ETFs

Investors use Chile to tap copper

With output well ahead of China and Peru, Chile is the world’s leading miner of copper; its annual output of 6 million tonnes represents a third of global production, and copper accounts for 24% of Chile’s total exports. Investor gains in Chile directly or indirectly depend on copper.

The global demand for refined copper amounted to 24.5 million tonnes in 2018, with an average annual growth rate of 3.4% for the previous 15-year period....

1 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
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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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Subscriber since 1996. Inner Circle Member Since 2006
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Inner Circle Pro subscriber

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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.