A recent report from Investor Economics says that there are about 200 exchange traded funds listed in Canada, representing about $40 billion in industry assets. During the first half of 2011, Canadian ETF holdings expanded by 11.5%.
“ETFs have become particularly important in the minds of Canadian investors in the past year,” Mary Anne Wiley, managing director and head of iShares Distribution at BlackRock Canada, said. “Some of the features that self-directed retail investors like include the transparency of ETFs–the ability to go in and see what’s in the portfolio in real time.” [ETF Spotlight: iShares MSCI Canada (EWC)]
The very first ETFs developed tracked the major indexes like the S&P 500, or the Toronto Stock Exchange. The popularity and success of the funds have urged providers to create funds that track various sectors, currencies, and commodities, as well as the bond market, reports Peter Kenter for The Gazette. There are also leveraged funds and inverse ETFs that let investors short markets.
“One of the biggest investor misconceptions is that all ETFs are the same,” Wiley said. “Product innovation has outpaced investor education. ETFs now give you exposure to almost anything,and although they spread the risk across the portfolio, investors still need to assess their tolerance for risk, even though the job of sifting through the portfolio takes a little more work.” [The Contrarian: Single-Country ETFs]
Scotia iTrade has waived commission fees on 46 of its ETFs. In the U.S., some brokers are offering free ETF trades to clients.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.