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]
Cash can be a useful asset in a balanced portfolio, although the very low-interest rates of the last decade greatly diminished the attractiveness of that strategy. Nevertheless, many investors will hold a portion of their portfolios in cash to cover emergency expenses or to take advantage of market opportunities as they arise.
Cash has provided reasonable returns over the long term....
Bank of Montreal (BMO) recently launched three asset allocation ETFs that invest in other BMO ETFs.
Each of the three ETFs acts as “fund of funds,” with its low 0.20% MER factoring out the underlying fees of its component funds.
BMO CONSERVATIVE ETF $31.31 (Toronto symbol ZCON) is designed to provide income and moderate long-term capital appreciation by investing in global equity and fixed-income ETFs....
The attraction of holding cash has diminished greatly over the past decade due to a low interest rates. Still, many investors hold it in their investment portfolios. That’s not necessarily to earn income, but as a byproduct of their normal portfolio activities or as a reserve, so they can take advantage of market opportunities as they arise.
Here are three low-risk money market ETFs that let investors hold cash and at the same time earn reasonable income....
In the U.S., net inflows amounted to $68.1 billion through the end of May.
The ETFs with the lowest expense ratios still tend to attract the most investment.
A good example is the top gainer in the U.S....
VANECK VECTORS VIETNAM ETF $16.26 (New York symbol VNM; buy or sell through brokers) holds Vietnamese companies and foreign firms that get a significant share of their revenue from the Southeast Asian nation.
The ETF’s top holdings are Vingroup (conglomerate), 8.0%; Vietnam Dairy, 7.6%; No Va Land Investment Group, 7.1%; Bank for Foreign Trade of Vietnam, 6.0%; Vinhomes (real estate), 6.5%; and Mani Inc....
The six ETFs we update below mainly hold high-quality stocks that are widely traded on Canadian and U.S. exchanges. Each fund tracks the performance of a major stock market index. That’s different from ETFs focused on narrower indexes or themes such as cryptocurrencies or biotechnology.
Of course, you pay brokerage commissions to buy and sell these investments....