What Are ETFs?

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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