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Some basics on ETFs please

4618 Views 4 Replies 5 Participants Last post by  leslie
I would appreciate some basic links on how to evaluate ETFs please.

For example: take CLAYMORE GLOBAL AGRICULTURE, COW.TO: (My life has cow themes as a farmer)
The management fees are 0.65% which seem reasonable.

What else should I consider when looking at these ETF type equities?

Thank you!
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I don't know much about the COW.TO product specifically, but some things I look for when comparing ETF's are:

1. Expenses (you've already mentioned this).
2. Holdings, and the % made up by the top 10 holdings - you may or may not want an ETF which is made up of only 5 holdings (see XIT - Canadian Tech) if you are looking for diversification.
3. How the index is constructed - market cap vs. fundamental weighting vs. other.
4. Average volume traded - if liquidity is important to you - e.g. the iShares EAFE index - the CAD$ ETF traded on the TSX has a MUCH lower volume of trading than the US$ NYSE equivalent.
5. Active vs. passive management
6. if investing in an index tracking ETF - what is the tracking error

Just a few things I could come up with on the top of my head. YMMV.
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