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:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

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ETFs Library Archives

Beware agriculture’s market volatility

Despite the significant long-term growth potential in food demand, the prices of agricultural commodities are volatile and as a group have performed poorly over the past 17 years. Still, many of the top companies involved in the industry have done well and outperformed the S&P… Read More

Two new ETFs for Canadian investors

This month we look at new ETFs that use derivative instruments to target specific investment outcomes. The BMO U.S. Equity Buffer ETF aims to offer upside market gains, combined with limited protection against market declines. The Harvest Industrial Leaders Income ETF aims to supplement the… Read More

Tourists returning to Vietnam spur its economy

Tourism has become one of the major segments of Vietnam’s economy in recent years, but the industry was severely disrupted by the COVID-19 pandemic. Today, the country’s tourism sector continues to recover following the reopening of its border to international tourists in March 2022.
The growth… Read More

Investors can share in Vietnam’s export gains

The Vietnamese economy continues to expand steadily in the wake of the pandemic—with tourism playing a key role. Longer-term, it should also continue to attract foreign manufacturers looking to steer clear of any China-U.S. trade issues. Meanwhile, the country’s free-trade pact with the European Union… Read More

Boost your gains with these top IT funds

Information technology has been the best-performing market segment over the past 25 years, although there have been some big downs along with the big ups. Going forward, we still see top information technology stocks—and the ETFs that hold them—as an attractive component of an investor’s… Read More

Agriculture ETFs tap rising demand

Crop and food prices will continue to fluctuate from year to year, but it’s a good bet that global food production and consumption will continue to increase. We think the best way to profit is through shares of well-established companies with a range of operations… Read More

Hold this top REIT ETF

ISHARES S&P/TSX REIT INDEX ETF, $15.09, is a hold. The ETF (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) lets investors tap all 16 Canadian real estate investment trusts in the S&P/TSX REIT Index. Investors pay an MER of 0.61%, and the fund gives you a 5.1% yield.
The… Read More

This solar ETF is a buy

INVESCO SOLAR ETF, $48.53, 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.
Its top holdings are First Solar (China; solar panels) at 16.0%; Enphase Energy (U.S.; home solar… Read More

Here are two top ETFs for your foreign gains

Generally speaking, Canadians are blocked from buying mutual funds that are registered in the U.S. unless those funds are also registered with provincial securities commissions. (Moreover, some Canadian mutual funds are only available in a limited number of provinces.)
Investors in this country can, however, buy… Read More

Mid-cap stocks are a portfolio plus

Medium-sized companies are a bit like the proverbial middle child—they tend not to get as much attention from investors as the smallest or the biggest. But this creates opportunities for investors who are prepared to add the best of those stocks—or the ETFs that hold… Read More

Precious metals offer diversification—and gains

Physical gold and silver have been strong performers over the past two decades even beating the S&P 500. Gold has also been much less volatile than the equity markets.
Investors shouldn’t overindulge in any one investment, and that includes gold, silver, platinum or any other precious… Read More

Two new ETFs for Canadian investors

This month we discuss a new, competitively priced ETF holding physical gold, as well as a fund aiming to ride the artificial intelligence wave.
BMO GOLD BULLION ETF $34.29 (Toronto symbol ZGLD) aims to replicate the performance of the price of gold bullion, net of fees and expenses. It does… Read More

The large underground economy of Italy

An informal economy (or underground economy) is the part of an economy that is neither taxed nor monitored by any form of government. Informal economic activity ranges from unregistered legal activities to outright illegal activities. Examples include undocumented employment, fraudulent accounting practices, small-scale farming, gambling,… Read More

Buy this ETF for the top Italian stocks

The Italian economy has recovered well from the pandemic setback, but growth slowed last year as high energy costs and interest rates weighed on consumers. Unemployment, especially among the youth, has improved, but a large, untaxed informal sector (see box next page) and high government… Read More

Diversify your portfolio with mid-cap stocks

Many investors overlook mid-cap stocks, thinking that a combination of large- and small-cap stocks will provide their portfolios with all the diversification they need. However, as a group, U.S. mid-cap stocks have often performed better than large caps and are generally less risky than small… Read More

Precious metals can boost your returns

Precious metals should let you profit over the next few years if interest rates begin falling (a clear possibility). That lowers the appeal of the U.S. dollar and increases the appeal of gold—and other precious metals—as a store of value. Here we look at three… Read More

Japan’s future is bright

ISHARES MSCI JAPAN INDEX FUND, $67.11, is a buy. The ETF (New York symbol EWJ; buy or sell through brokers; us.ishares.com) aims to mirror the return of the Morgan Stanley Capital International Japan Index.
The fund’s top holdings include Toyota, 6.3%; Mitsubishi UFJ Financial, 2.9%; Tokyo Electron (computer chips), 2.7%;… Read More

Six top international ETFs: 4 buys, 2 holds

Most top international markets have rebounded since their big drop at the start of the pandemic. Going forward, we think the outlook remains positive for quality stocks in those markets. One way to profit from their growth—while cutting your risk—is to invest in top ETFs.
Here’s… Read More