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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You Can See Our Exchange-Traded Funds Portfolio For May 2024 Here.
ETFs in brief
Exchange-traded funds are set up to mirror the performance of a stock-market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings of that index or… Read More
A key aspect of our TSI investment philosophy is portfolio diversification across the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities).
That way, investors can avoid overloading their portfolios with stocks in one sector that are about to slump simply because… Read More
Fidelity recently boosted its Canadian ETF roster by adding seven new ETFs covering Canadian, U.S., and international equities. Below we highlight a fund that holds long and short positions in a portfolio of global equities, as well as an ETF that invests indirectly in public… Read More
BHP Group is the largest mining company in the world by market value, ahead of Rio Tinto, Vale, and Anglo-American.
Iron ore is its main product, with the Pilbara mines in Western Australia representing its core asset. Production costs from those mines are among the lowest… Read More
The Australian economy rebounded strongly in the wake of the pandemic. In the near term, though, it now faces challenges from still-high inflation, which is hurting consumer spending. In addition, it faces uncertain global growth amid still-elevated interest rates. However, steady global demand for commodities… Read More
This section is the second part of our discussion on ETFs that represent each of the five main economic sectors. Here we cover ETFs in the Consumer, Manufacturing and Finance sectors.
Please see the supplement section starting on page 49 for more information on our five-sectors… Read More
VANGUARD FTSE GLOBAL ALL CAP EX CANADA INDEX ETF $56.71 (Toronto symbol VXC; TSINetwork ETF Rating: Aggressive; Market cap: $1.8 billion) tracks the FTSE Global All Cap ex Canada Index. Companies located in the U.S. make up the largest component (63.4%), followed by Japan (6.6%), the U.K…. Read More
GRAYSCALE BITCOIN TRUST ETF $62.47 (New York symbol GBTC) is the largest ETF investing in the cryptocurrency bitcoin. It has over $23 billion of assets under management.
The fund has been operational since 2013 and became the first publicly traded bitcoin fund in 2015. The fund manager applied to… Read More
A key rule of our three-part Successful Investor strategy is to spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities).
This has two main benefits: a) It keeps you from… Read More
VANECK VECTORS VIETNAM ETF, $13.56, is a buy for aggressive investors. This emerging-markets ETF (New York symbol VNM) taps the leading Vietnamese firms as well as foreign firms that get a significant share of their revenue from this Southeast Asian nation. The fund started up in August 2009. Its… Read More
ISHARES MSCI TAIWAN INDEX FUND, $49.01, is a buy for aggressive investors. The ETF (New York symbol EWT; buy or sell through brokers) gives you direct exposure to some of the top public companies of this East Asian powerhouse economy.
The fund’s largest holding is Taiwan Semiconductor at 23.7%… Read More
The major Canadian and U.S. stock markets, while still subject to volatility, continue to offer attractive returns for investors—especially if you buy the top stocks. All in all, we think that if you can afford to stay in the market for several years or longer,… Read More
Value investing has long been considered the investment style that provides superior returns over the long run. However, for much of the past 15 years “growth investing” produced much better results. That may be changing, as “value investing” staged a comeback over the past three… Read More
Consumer defensive companies such as Walmart, Proctor & Gamble, and Nestle provide basic goods that consumers need even during a recession. It is therefore not surprising that these companies have relatively stable revenue and profit histories and can maintain their dividends during tough economic times.
In… Read More
This month we highlight an ETF that aims to profit from the popularity of a single company—Nvidia—and a second that wants to jump aboard the artificial intelligence bandwagon.
NVIDIA YIELD SHARES PURPOSE ETF $30.82 (Neo Exchange symbol YNVD) invests in the common stock of Nvidia Corp. (Nasdaq symbol NVDA). The… Read More
Switzerland is one of the most competitive countries in the world according to the most recent annual survey published by the IMD World Competitiveness Center.
The ranking system considers 336 different data points.
Those data points are grouped into four broad overall categories: economic performance, government efficiency,… Read More
Switzerland has a stable, export-oriented economy, which regularly ranks among the world’s most competitive. In addition, it is home to some of the top performing and best-known global companies. The Swiss economy continues to outperform the overall Euro area, aided by comparatively low inflation and… Read More
As their name implies, value stocks trade lower than their fundamentals would suggest. Investors perceive them as undervalued with the potential to rise. Even so, it’s best for you to zero in on the shares of quality companies with a consistent history of sales and… Read More
GLOBAL X SUPERDIVIDEND ETF $21.23 (New York symbol SDIV) invests in 100 of the highest-yielding stocks worldwide.
Stocks in the fund’s portfolio are equally weighted to reduce the risk associated with a high exposure to individual companies. The stocks must also meet certain market-cap and liquidity criteria.
With 33.8%… Read More
Traditionally, the price of most stocks, and the ETFs that hold them, drop in market declines. However, certain segments generally perform better than the overall market. Below, we highlight three ETFs focused on firms that produce and sell consumer staples. They should, as in past… Read More
