Index funds are mutual funds or exchange-traded funds (ETFs) that invest to equal the performance of a market index, such as the S&P/TSX 60.). Index funds do show better long-term performance than about two-thirds of actively-managed mutual funds with long-term track records.
That’s partly because index fund fees run as low as 0.12% of assets per year. In our view, the big advantage of Canadian index funds is that they can help you avoid the risk of choosing a fund with a management style that virtually guarantees below-average long-term performance.
In that category we’d place mutual funds that pursue a market timing or sector-rotation approach to investing. Managers of these funds try to out-perform the market by betting on relatively short-term trends, rather than putting their investors in a position to profit from long-term growth in the economy. In any one year, the top fund is often run by a market timer who is having his or her proverbial ‘day in the sun’. However, in any one decade, the top funds are run by conservative managers who focus on long-term growth in the economy.
We still feel that most investors will profit the most by holding a well-balanced portfolio of high-quality stocks that follow our three-part Successful Investor strategy. However, if you don’t want to build a portfolio, then index fund mutual funds or ETFs can provide a good alternative. Here is our three-part strategy:
Discover which stocks to buy and hold forever in your portfolio in this FREE special report, 10 Stocks to Buy and Hold Forever.
The easier an investment is to explain and understand, the less likely it is to harbour hidden risks and costs that can only work against you.
ETFs can be a good investment option—if you follow these tips when building your ETF portfolio.
Advantages of Canadian index funds… Read More
OVINTIV INC., $14.66, is a buy. The energy producer (Toronto symbol OVV; Shares outstanding: 259.8 million; Market cap: $3.8 billion; TSINetwork Rating: Average; Dividend yield: 3.6%) recently became a U.S. company and changed its name from Encana Corp.
A key reason for the move to the U.S. was to… Read More
Cash flow rose 4.6% in the most-recent quarter for this provider of renewable power to over 600 high-quality customers.
This company holds a lot of conceptual appeal for investors and offers stable cash flows from a diverse mix of hydroelectric, wind and solar power.
BROOKFIELD RENEWABLE PARTNERS… Read More
TORSTAR CORP., $0.70, Toronto symbol TS.B, is still a hold.
The company publishes The Toronto Star, Canada’s largest daily newspaper by circulation. Its other daily and weekly papers are spread across Ontario. In 2015, the company acquired 56% of VerticalScope, a private firm that operates over… Read More
You will have better opportunities for success with ETF investing when you follow our tips
In 1990, ETF investing was introduced in Canada. The fund was called Toronto Index Participation Shares, and started trading on the Toronto Stock Exchange (TSX). The shares, which tracked the TSE… Read More
VERIZON COMMUNICATIONS INC. $50 remains a buy. The company (New York symbol VZ; Income-Growth Dividend Portfolio, Utilities sector, Shares o/s: 4.1 billion; Market cap: $205.0 billion; Dividend yield: 4.9%; Dividend Sustainability Rating: Highest; www.verizon.com) raised the dividend for its investors by 2.1% with the November 2019 payment. The new… Read More
CENOVUS ENERGY, $9.32, is a buy for the Resources segment of your portfolio. The company (Toronto symbol CVE; Shares o/s: 1.2 billion; Market cap: $11.5 billion; TSINetwork Rating: Average; Dividend yield: 2.7%; www.cenovus.com) owns 100% of the Christina Lake and Foster Creek oil sands properties in Alberta… Read More
BROOKFIELD RENEWABLE PARTNERS L.P. $70 is a buy. Through units in the partnership (Toronto symbol BEP.UN; High-Growth Dividend Payer Portfolio, Utilities sector; Units outstanding: 308.6 million; Market cap: $21.6 billion; Dividend yield: 4.1%; Dividend Sustainability Rating: Above Average; www.bep.brookfield.com) you gain a stake in 219 hydroelectric generating stations, 108… Read More
Tax free savings accounts let you earn investment income tax free. Make sure you’re getting the most profit and tax benefits from your TFSA.
The federal government first made the tax free savings account (TFSA) available to investors in January 2009. These accounts let you earn… Read More
OVINTIV INC. $22.39, is a buy for the Resources sector of your portfolio. The energy producer (Toronto symbol OVV; Shares outstanding: 259.8 million; Market cap: $27.5 billion; TSINetwork Rating: Average; Dividend yield: 2.2%) is the former Encana Corp.
Shareholders and regulators recently approved Encana’s plan to become a.. Read More
Learn everything you need to know in 'The ETF Investor's Handbook' FREE Special Report from The Successful Investor.
ETFs Guide for Canadian Investors: Find the best way to invest in ETFs with low fees, low risk & high satisfaction.
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