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.

Read More

Diversify with these non-bank financials

September 13, 2018||Value Stocks

Most investors typically hold two, three or more of the big five Canadian banks. That makes sense given their steady profit growth and rising dividends. They also give investors exposure to a wide variety of financial services, including mutual funds, retirement planning and insurance.
Even so,… Read More

These top ETFs widen your global scope

September 6, 2018||ETFs

Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. In all, it administers over $5 trillion U.S., spread across 400 mutual funds and ETFs.
Generally speaking, Canadians are blocked from buying mutual funds that are registered in the U.S. unless those funds are… Read More

Rising dividend offsets a modest yield

August 30, 2018||Dividend Stocks

Broadridge’s rising revenue and earnings give it lots for room to keep increasing its dividend. With its higher share price, the current dividend yields a modest 1.4%.
Until April 2007, the company was a subsidiary of Automatic Data Processing (ADP) . That’s when ADP set it… Read More

How to Build a Balanced ETF Portfolio for Maximum Gains

August 16, 2018||ETFs

To create a balanced ETF portfolio, focus on funds that hold the kind of stocks we recommend
The best exchange-traded funds offer well-diversified, tax-efficient portfolios with exceptionally low management fees.

ETFs, with their relatively low management fees (MERs), have in large part eclipsed interest in mutual funds… Read More