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The two top holdings in the iShares MSCI South Korea ETF, Samsung Electronics and SK Hynix, are both among the top global manufacturers of memory semiconductors, although Samsung is also a major player in the mobile phone and consumer electronics market. Over the past five years, the stock price performances of the two companies were vastly different, with Hynix up by 394% compared to a 48% gain for Samsung.
Hynix has done well over the past five years, raising its revenue by 164% and its earnings per share by 638% while maintaining high profit margins—although the company did struggle in 2023 when semiconductor memory prices dropped sharply. The company’s success is mainly due to its dominant position in the high-bandwidth memory (HBM) market. That’s where Hynix has a global market share of about 70%, with Nvidia one of its key customers. The HBM chips are used in AI servers and are currently in demand, with high selling prices and profit margins.
Hynix has done well over the past five years, raising its revenue by 164% and its earnings per share by 638% while maintaining high profit margins—although the company did struggle in 2023 when semiconductor memory prices dropped sharply. The company’s success is mainly due to its dominant position in the high-bandwidth memory (HBM) market. That’s where Hynix has a global market share of about 70%, with Nvidia one of its key customers. The HBM chips are used in AI servers and are currently in demand, with high selling prices and profit margins.
When we last wrote about South Korea in late 2024, we concluded that there were excellent opportunities among high-quality South Korean companies. Since that time, our recommendation of the iShares MSCI South Korea ETF has gained a whopping 75.5% for our subscribers! Meanwhile, many of those same stocks still trade at attractive valuations. (For more on that, see box next page.)
Here is an ETF that provides exposure to the top South Korean publicly listed companies.
Here is an ETF that provides exposure to the top South Korean publicly listed companies.
One of the major benefits of exchange-traded funds is the lower and more transparent fees when compared to mutual funds.
The average cost in Canada for a passively managed mutual fund is between 0.50% and 0.90%, while actively managed mutual funds have MERs between 2.0% and 2.5% (Advisor-Class A Series). This compares to average MERs of passively managed ETFs of around 0.35% and actively managed ETFs of 0.90%.
Fees can significantly impact the total returns of an investment plan. Compare a fund that charges 2.0% per year to another that charges 0.25%. Both offer exposure to the same group of assets, say, global stocks. And let’s further assume that both funds see a return of 10% per year.
The average cost in Canada for a passively managed mutual fund is between 0.50% and 0.90%, while actively managed mutual funds have MERs between 2.0% and 2.5% (Advisor-Class A Series). This compares to average MERs of passively managed ETFs of around 0.35% and actively managed ETFs of 0.90%.
Fees can significantly impact the total returns of an investment plan. Compare a fund that charges 2.0% per year to another that charges 0.25%. Both offer exposure to the same group of assets, say, global stocks. And let’s further assume that both funds see a return of 10% per year.
Here are three more ETF investment ideas for 2026. See also the related Supplement on page 19 and 20 for more on the prospects for these types of funds.
INVESCO AEROSPACE & DEFENSE ETF $176.98 (New York symbol PPA; TSINetwork ETF Rating: Aggressive; Market cap: $6.9 billion) tracks the SPADE Defense Index. Qualifying stocks are included on an adjusted market value basis. The fund and the index are rebalanced and reconstituted quarterly.
Firms held in the portfolio include those that target markets such as naval vessels, military aircraft, armoured vehicles, drones and remotely piloted vehicles, missiles, secure communications, space systems, biometric screening systems, and military cybersecurity.
INVESCO AEROSPACE & DEFENSE ETF $176.98 (New York symbol PPA; TSINetwork ETF Rating: Aggressive; Market cap: $6.9 billion) tracks the SPADE Defense Index. Qualifying stocks are included on an adjusted market value basis. The fund and the index are rebalanced and reconstituted quarterly.
Firms held in the portfolio include those that target markets such as naval vessels, military aircraft, armoured vehicles, drones and remotely piloted vehicles, missiles, secure communications, space systems, biometric screening systems, and military cybersecurity.
BetaPro Natural Gas Leveraged Daily Bull ETF $12.25 (Toronto symbol HNU) aims to use a combination of derivatives and debt to offer daily returns that correspond to twice the daily gains (200%) of the BetaPro Natural Gas Rolling Futures Index.
If HNU is successful in meeting its investment objective, its price should gain (or lose) approximately twice that of the index’s rise.
The ETF launched in January 2008 and holds assets of $148 million. The MER is 1.38%; there are also trading costs that add 0.88% to the overall costs of the ETF. Together, these fees make for a high 2.26%.
If HNU is successful in meeting its investment objective, its price should gain (or lose) approximately twice that of the index’s rise.
The ETF launched in January 2008 and holds assets of $148 million. The MER is 1.38%; there are also trading costs that add 0.88% to the overall costs of the ETF. Together, these fees make for a high 2.26%.
VANGUARD INDUSTRIALS ETF $318.87 (New York symbol VIS; TSINetwork ETF Rating: Conservative; Market cap: $6.8 billion) invests in U.S. industrial companies. That includes stocks of companies that convert unfinished goods into finished durables used to manufacture other goods or to provide services. The ETF began trading on September 23, 2004. It charges a low MER of 0.09%; its dividend yield is 1.0%.
The highest-weighted stocks in the Vanguard U.S. Industrials ETF are General Electric (5.1%), Caterpillar (4.4%), RTX (3.8%), Uber Technologies (2.8%), GE Vernova (2.6%), Union Pacific (2.2%), Eaton Corp. (2.2%), Honeywell (2.0%), Boeing (2.0%), Deere & Co. (1.9%) and Parker-Hannifin (1.8%).
The highest-weighted stocks in the Vanguard U.S. Industrials ETF are General Electric (5.1%), Caterpillar (4.4%), RTX (3.8%), Uber Technologies (2.8%), GE Vernova (2.6%), Union Pacific (2.2%), Eaton Corp. (2.2%), Honeywell (2.0%), Boeing (2.0%), Deere & Co. (1.9%) and Parker-Hannifin (1.8%).
Here we highlight two ETF investment ideas for 2026. The Supplement on page 19 expands on their strategies and outlook.
ISHARES CORE MSCI CANADIAN QUALITY DIVIDEND INDEX ETF $37.46 (Toronto symbol XDIV; TSINetwork ETF Rating: Conservative; Market cap: $3.7 billion) tracks the MSCI Canada High Dividend Yield Index. The index includes Canadian companies with growing or steady dividends, solid balance sheets, and less volatile earnings. Stock weights are capped at 10% of the portfolio on the rebalancing dates.
The fund’s approach has a number of negatives for investors. It incurs ongoing brokerage charges as it rebalances its holdings. The approach also forces the ETF to sell off portions of stocks that are rising steadily—perhaps missing out on some of the stocks’ biggest gains.
ISHARES CORE MSCI CANADIAN QUALITY DIVIDEND INDEX ETF $37.46 (Toronto symbol XDIV; TSINetwork ETF Rating: Conservative; Market cap: $3.7 billion) tracks the MSCI Canada High Dividend Yield Index. The index includes Canadian companies with growing or steady dividends, solid balance sheets, and less volatile earnings. Stock weights are capped at 10% of the portfolio on the rebalancing dates.
The fund’s approach has a number of negatives for investors. It incurs ongoing brokerage charges as it rebalances its holdings. The approach also forces the ETF to sell off portions of stocks that are rising steadily—perhaps missing out on some of the stocks’ biggest gains.
A: BMO US Dividend Hedged to CAD ETF, $34.35, symbol ZUD on Toronto (Units outstanding: 4.2 million; Market cap: $145.1 million; www.etfs.bmo.com), holds U.S. stocks that have maintained or increased their dividend rates over the last three years and meet other criteria focused on yield and dividend payout ratio. The fund’s managers rebalance the underlying portfolio in June and December.
Top holdings are Broadcom, AbbVie, IBM, Apple, Cisco, JPMorgan Chase, Exxon Mobil, Merck, Oracle, and Philip Morris International.
The ETF is hedged against movements of foreign currencies against the Canadian dollar. Its value rises and falls solely with the stocks in its portfolio, so it wouldn’t give you any diversification through foreign currency exposure.
Top holdings are Broadcom, AbbVie, IBM, Apple, Cisco, JPMorgan Chase, Exxon Mobil, Merck, Oracle, and Philip Morris International.
The ETF is hedged against movements of foreign currencies against the Canadian dollar. Its value rises and falls solely with the stocks in its portfolio, so it wouldn’t give you any diversification through foreign currency exposure.
A: Lindsay Corp., $123.73, symbol LNN on New York (Shares outstanding:10.6 million; Market cap: $1.3 billion; www.lindsay.com), manufactures irrigation and infrastructure equipment and technology.
The company’s irrigation products include centre-pivot and lateral-move irrigation systems, remote irrigation management and scheduling technology, and other agriculture-related engineering services. Centre pivots rotate around a fixed point, creating circular patterns (often with corner arms for squares), while lateral moves travel in straight lines, covering rectangular fields nearly completely. All together, this segment accounts for 84% of the company’s revenue.
The infrastructure products it manufactures include movable highway and road barriers, specialty barriers and crash cushions, road marking and road safety equipment, and railroad signals and structures. Lindsay also provides equipment for monitoring critical infrastructure. This segment accounts for the remaining 16% of revenue.
The company’s irrigation products include centre-pivot and lateral-move irrigation systems, remote irrigation management and scheduling technology, and other agriculture-related engineering services. Centre pivots rotate around a fixed point, creating circular patterns (often with corner arms for squares), while lateral moves travel in straight lines, covering rectangular fields nearly completely. All together, this segment accounts for 84% of the company’s revenue.
The infrastructure products it manufactures include movable highway and road barriers, specialty barriers and crash cushions, road marking and road safety equipment, and railroad signals and structures. Lindsay also provides equipment for monitoring critical infrastructure. This segment accounts for the remaining 16% of revenue.
Q: What is TSI’s analysis of Autodesk? It seems to be a solid AI-related pick going forward. Thanks.
A: Autodesk Inc., $263.93, symbol ADSK on Nasdaq (Shares outstanding: 212.0 million; Market cap: $57.4 billion; www.autodesk.com), is a leader in 3D design, engineering and entertainment software. Those products include AutoCAD, Revit, Inventor, Fusion 360, 3ds Max, and Maya software.
The company’s four product families by revenue are Architecture, Engineering, Construction and Operations (50%); AutoCAD and AutoCAD LT (25%); Manufacturing (19%); and Media & Entertainment (5%). Other revenue sources account for the remaining 1%.
The U.S. contributes 36% of its sales, with the EMEA (Europe, Middle East, and Africa) accounting for 39%, APAC (Asia Pacific), 17%, and the rest of the Americas, 8%.
The company’s four product families by revenue are Architecture, Engineering, Construction and Operations (50%); AutoCAD and AutoCAD LT (25%); Manufacturing (19%); and Media & Entertainment (5%). Other revenue sources account for the remaining 1%.
The U.S. contributes 36% of its sales, with the EMEA (Europe, Middle East, and Africa) accounting for 39%, APAC (Asia Pacific), 17%, and the rest of the Americas, 8%.