Tag: exchange traded funds

What are Exchange Traded Funds?

Exchange-traded funds are index funds that can be traded as a single equity. They sometimes aim to achieve the same return as a stock index.

Exchange-traded funds (ETFs) are set up to mirror the performance of a stock-market index. They also offer much lower fees than mutual funds. Fees are as low as 0.10% a year for ETFs vs. mutual funds that can charge you 2% to 3% or higher on their funds. ETFs can save you a lot of money and boost your returns over time.

Exchange-traded funds hold baskets of stocks that represent stock indexes. These indexes include the S&P/TSE 60 Index. Like stocks, exchange-traded funds trade on stock exchanges, and their ETF prices are quoted daily in newspaper stock tables. Although the investor pays brokerage commissions to buy and sell them, these are offset by lower management fees. Most indexes add or remove shares only when the underlying index changes. This low turnover is more tax efficient for investors, who don’t incur the regular capital gains taxes from annual distributions made by conventional mutual funds.

Exchange-traded funds have a place in every investor’s portfolio, and 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; Consumer; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

Most investors who successfully build wealth over the long term follow certain investing practices. Find out what they are in our free investing guide, The 10 Best Practices of Successful Investors. Like stocks, exchange-traded funds (ETFs) trade on stock exchanges, and their prices are quoted daily in newspaper stock tables. Although the investor pays brokerage commissions to buy and sell them, these are offset by lower management fees. Most index funds add or remove shares only when the underlying index changes. This low turnover is more tax efficient for investors, who don’t incur the regular capital gains taxes from annual distributions made by conventional mutual funds.

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3 key ETF Definitions for Investors

3 key ETF Definitions for Investors
February 10, 2020||ETFs

Our key ETF definitions will help you better understand ETF investing
The simplicity of investing in ETFs holds a lot of appeal for many investors. We’ve compiled a list of ETF definitions so you can determine if ETFs are right for your portfolio.

What does ETF mean?

ETF… Read More

Q: Dear Pat: Can you please explain how real return bonds work? Also, are they worth investing in, especially the iShares Canadian Real Return Bond Index ETF and the iShares Floating Rate Index ETF? Thanks.

January 29, 2019||How To Invest

A: Real-return bonds pay you a rate of return that’s adjusted for inflation.

Here’s how they work:

When a real-return bond is issued, the level of the consumer price index (CPI) on that date is applied to the bond. After that, both the principal and interest payments… Read More