What are ETFs?
ETFs are investments that can hold:
- Bonds
- Stocks
- Gold Bullion
- Cryptocurrencies
- Canadian ETFs track a wide range of different asset classes via indexes. Most ETFs are tied to index products, including both equity or fixed income funds.
Index Tracking Funds
- Passively Managed: Seek to replicate the performance of their benchmarks.
Non-Indexed Funds
- Actively Managed: Analysts and portfolio managers decide where the fund invests.
How are ETF prices set?
- Unlike mutual funds, pricing is available through the trading day.
- It’s based on the underlying portfolio value.
- It’s not set by supply and demand as it is for stock.
For these reasons, market makers help maintain ETF prices and provide liquidity to investors.
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