Global X S&P/TSX Venture 30 Canada ETF: First Global ETF Targeting Canadian Emerging Companies

Global X Funds Launches Canadian Junior Mining and Exploration Companies ETF on NYSE Arca Exchange

First Published Date: March 24, 2011 ADawnJournal.com

In these times of worrying investments, many investors want to go with something that is a bit safer. Hence the purpose of exchange-traded funds, which do not try and beat the stock market, which many will tell you is impossible, but only to replicate it. With an exchange traded fund, or ETF, you are trading based on an exchange, rather than individual stocks. This then allows you more security because not all your eggs are in one basket and you can therefore ensure you are okay if the market goes down.

Recently it was announced that Global X S&P/TSX Venture 30 Canada ETF was launched and it focuses on one of the strongest areas of the Canadian economy; energy and commodities. This ETF is split between materials and energy sectors, with slightly more material stocks in it than energy. This gives you a good mix in case one of the sectors goes down. Some of the main stocks on this ETF include Atac Resources, Rainy River Resources and Canacol Energy.

Of course, that is not all the ETFs you can choose from in Canada. One of the most well-known and used is the iShares MSCI Canada ETF. This ETF covers more range than the other ETF mentioned here. ECW, as it is called on the trading floor, has half of its portfolio made up of material and energy stocks, The rest of the portfolio is mostly made up of financial stocks. This is important because it gives you three different sectors that you can work with in order to ensure you get the most diversified portfolio that you can. The main stocks on ECW are Suncor Energy and Canadian Natural Resources.

When you are trading on the market, you want to ensure that you have a bit of relative safety so that you do not lose everything that you have. Many investors put their hopes on risky stocks and ending up losing everything during the financial crisis. If you are in for the long haul and would like to have a few stocks to diversify, then you can look at these ETFs. ETFs are known for providing better level of safely than picking individual stocks. With ETFs, you can invest in specific sectors or even stocks that only match your morale code. For example, you can choose ETFs that only have stocks from companies with good employee records and others that are not related to weapons or tobacco.

If you like to invest in Canadian companies, then you may want to look at investing in these ETFs, which are working on stocks that are in the highly profitable energy and manufacturing industries. In the case of the energy industry, it was one of the few industries in Canada to continue to do well despite the financial meltdown.

If you are thinking of investing with ETFs, then these two ETFs are the ones you can put in your research list Don’t forget to do your research making any financial decisions, and make sure to find the product that best suits your needs.

Link: Global X Funds

Canadian Dividend ETFs

Canadian Income ETFs

First Published Date : June 19, 2011 ADawnJournal.com

Who does not like to sit back, relax, and collect dividends on a regular basis without worrying too much about picking individual stocks or giving hefty fees (MER) to mutual funds? ETFS allow you to do just that, and for income hungry investors the choices to pick income or dividend EFTs are getting noticeably wider in Canada. Today, I am going to discuss my top eight ETFs I like for generating income. ETFs trade on stock exchanges just like stocks and you can buy them through your discount brokerage account or through a licensed financial advisor. For more information on ETFs, please visit A Dawn Journal ETF Section and TMX Money ETF Section.

BMO Covered Call Canadian Banks ETF (TSX: ZWB) – This ETF invests in Canadian banks and writes out of the money covered call options, thus earning premiums on call options. As of this writing, it has a staggering portfolio yield of 9.56 per cent and MER is 0.65 per cent. Before considering this ETF, do understand how the covered call option strategy works and the risks associated with it.

BMO monthly Income ETF (TSX: ZMI) – This ETF, actually, is an ETF of ETFs. It maintains a 50/50 balance of equities and fixed income, investing 50/50 in high yielding equity and fixed income ETFs. Portfolio yield is 5.35 per cent and MER is 0.55 per cent.

Claymore 1 – 5 YR Laddered Corporate Bond ETF (TSX: CBO) – This ETF tracks the DEX 1-5 Yr Laddered Corporate Bond Index. It tries to main a continuous maturity laddered portfolio of securities maturing in a proportional, annual sequential pattern. Portfolio yield is 4.63 per cent and MER is 0.27 per cent.

Claymore S&P/TSX Preferred Share ETF (TSX: CPD) – Simply enough, this ETF tries to match the performance of the S&P/TSX Preferred Share index. Portfolio yield is 4.80 per cent and MER is 0.48 per cent.

Claymore 1 – 5 YR Laddered Government Bond ETF (TSX: CBO) – Similar concept like CBO mentioned above, but this ETF tracks the DEX 1-5 Year Laddered Government Bond index instead of the DEX 1-5 Yr Laddered Corporate Bond Index. Portfolio yield is 4.52 per cent and MER is 0.16 per cent. Notice the MER; it’s really a bargain.

Claymore Canadian Financial Monthly Income ETF (TSX: FIE) – Name says it all. This ETF tries to provide monthly cash distribution of $0.04 per units. Portfolio yield is 6.70 per cent and MER is 1.24 per cent. MER is quiet high.

iShares Diversified Monthly Income (TSX: XTR) – Similar concept like ZMI mentioned above, XTR is an ETF of ETFs and provides consistent monthly cash distribution. Portfolio yield is 5.78 per cent and MER is 0.55 per cent.

iShares S&P/TSX Capped REIT Index ET (TSX: XRE) – This ETF tries to match the performance of the S&P/TSX Capped REIT Index. Portfolio yield is 4.88 per cent and MER is 0.59 per cent.

Disclosure – This article is for information purposes only and No information is intended as investment, tax, accounting or legal advice, or as an offer to sell or buy or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security, ETF, or fund. The author assumes no liability for any inaccurate, delayed or incomplete information, nor for any actions taken in reliance thereon. You bear responsibility for your own investment research and decisions, and should seek the advice of a qualified financial professional before making any investment decision. I own some of the ETFs mentioned here.

Canada ETFs Begin Charging HST

ETFs, HST, and Canada

First Published Date : November 21, 2010 ADawnJournal.com

In Ontario and British Columbia, the Harmonized-Sales Tax (HST) is something that is not very popular. As well, it is beginning to chance how things are priced with exchange-traded funds (ETF). In the past, iShares, which was launched by Carclays Global Investors in the late 1990s, has never charged the Goods and Services Tax (GST) on its ETFs. The tax was paid out by the company itself, making ETFs more affordable and more desirable from the perspective investors.

Sadly, that changed this past year when BlackRock Inc, which recently purchased iShares in 2009, decided to begin charging HST.

HST is the combination of the provincial sales tax of Ontario, and the GST of the federal government. When put together, the HST comes to 13 per cent. On July 1, it took effect in Ontario, combining the eight per cent provincial sales tax and the five per cent GST.

In a notice to investors, BlackRock stated that it will no longer pay for GST on behalf of the family of iShare funds.

Many investors are now asking why this has become the state of affairs for the iShares ETF. The main reason is that globally, most ETF companies do not absorb the taxes and BlackRock wants to make sure there is an industry standard across the globe to make investing easier for countries around the world.

While they say that, most likely the reason is that the cost of paying 13 per cent of the tax for investors will simply amount to more than BlackRock can afford. While many investors are just told that the policy is to get everything under the same umbrella as the industry practice, it is not hard to figure out that BlackRock wants to make money, paying the HST costs them money, so they are no longer paying the HST.

Currently, iShares has three main rivals which is Claymore Investments, Bank of Montreal and BetaPro Management.

At this time, iShares controls 80 per cent of the ETF market within Canada, more than what smaller ETF companies hold in the market and those smaller companies have often not paid for the GST. Therefore, it can be seen that iShares is getting in line with companies that are much smaller than them, an odd thing to do when you are an industry leader.

Regardless, the days of iShares being GST, PST and HST free are now gone. From now on, when you are buying ETFs in Canada through iShares, you are going to be paying for the HST on top of your purchase meaning The HST will be a part of the management expense ratio. While it is the norm in the industry, that does not mean investors have to be happy about it and you may see a backlash in the coming months and years as investors decide whether or not the new higher cost of the ETF is worth it.

Canadian Popular ETFs

 Some Popular ETFs in Canada

First Published Date : July 10, 2010 ADawnJournal.com

Investing in exchange-traded funds is considered to be one of the better ways to invest in the stock market. Where usually you are trying to beat the stock market, with exchange-traded funds you are only mirroring the index itself. This means that there is a better chance for long-term rewards. Of course, conversely you will end up having lower reward because there is lower risk. However, with lower risk comes the long-term ability to slowly build your investment without worry that you will lose it all. In Canada, ETFs are a very popular because they are somewhat safer investment vehicle than others and here are the most popular ETFs within Canada.

·   iShares CDN Jantzi Social Index: if you want to be socially-responsible with your investments, then this is the ETF for you. All the stocks on this index are picked through an extensive process that must meet criteria in terms of environmental records, social records and governance. This index has consistently outperformed the TSX 60 Index, which it mirrors.

·   iShares CDN LargeCap 60 Index: The most popular ETF in Canada, it consistently does well, leading the list of the most active TSX stocks. More than any other ETF in Canada, this is the choice for most investors who want to invest securely and safely.

·   Claymore S&P/TSX Cdn Dividend: This ETF tracks the TSX Canadian Dividend Aristocrats Index, which has stocks and income trusts on it that have, for at least five straight years, continually raised their dividends on an annual basis. One of the biggest benefits here is that there is a high yield dividend, twice that of other ETFs, plus the fact that there is very little competition on the ETF when compared with other ETFs like iShares.

·   Horizons AlphaPro Managed TSX 60: One of the more unusual of ETFs, this one is actively traded, which is unusual for ETFs as most use simple index tracking, rather than having a broker populate a list of stocks. What the broker will do is take the index and play around with the stocks on it to find the best option. The one drawback is that the ETF has only been around for a year and a half, so there is very little history to go on.

·   Claymore Canadian Fundamental Index: This ETF uses a basic index approach in that it will look at various factors based on things like revenues and cash flow, which gives a better and higher rating to stocks that are undervalued. Each year in March, the stock is rebalanced to reflect any changes in the world of the stock market. This index routinely does better than others, making it very popular for ETF investors.

If you are investing in ETFs, then you are probably doing it because it provides you with long term rewards and lower risk. If you are in Canada, then these are some of the ETFs you can keep an eye on to meet your investment goals to give you consistent rewards well into the future.

The Equal-Weight ETFs from BMO

Market-Cap Weighted or Equal-Weighted ETFs?

First Published: ADawnJournal.com May 30, 2010

Buying exchange-traded funds in Canada got much easier thanks to BMO Financial Group and the release of eight different ETFs that are equal-weighted and three that are currency-hedged. These two different types of ETFs are part of a key strategy by the Bank of Montreal to help set itself apart from ETFs that are put out by iShares and Vanguard, which currently dominate the market.

The currency strategy uses hedging to hedge foreign funds back into the Canadian dollar and this has actually been used quite a bit by iShares and Criterion Investments, which focuses only on currency hedging. However, that is not what is putting the Bank of Montreal in the papers these days; equal-weighting is.

Critics of ETFs say that market-cap weighted funds created high concentrations of large-cap stocks that are often over-valued. When the large-cap stocks get more and more overvalued, there is a greater weighting on them in the fund and that creates a higher risk for investors who put their money into the ETF. However, according to BMO, equal-weighting prevents this and therefore makes investing safer for ETF investors. How it works is if the top 10 stocks on the TSX represent 40 percent of the market cap of the index, equal-weighting puts every stock at the same weight no matter how large or small the market cap. That means that if there are 50 stocks on an ETF, each stock has a two percent weight within the stock.

However, BMO is not the only ones who offer the equal-weighted ETFs. Claymore Investments also offer them and the company states that it helps investors avoid overweighting overvalued stocks and underweighting undervalued stocks. Critics of the ETF state that often happens, as we have said, with ETFs that are not equal-weighted.

Exchange-traded funds are often looked at as a safe investment for many investors because with these you are not trying to beat the market, but instead just mirror the index. Too many times investors want to beat the stock market and that leads many of them down a road to ruin. With exchange-traded funds, even those that are not equal-weighted, there is a much safer path to go down. No, you do not make as much with these funds but if you can diversify your portfolio with them you help the hedge your bets in case the market takes a downturn.

It is very important that you do not put all your eggs in one basket. Now, with the equal-weighted ETF from banks and companies like Bank of Montreal and Claymore Investments, it is possible to make the safe investment of an ETF even safer for investors. You can expect that in the coming years, many investors will be putting their money into the equal-weighted ETFs instead of risking it in mad-cap investments that could cost the investor everything they have