Unlike conventional mutual funds, an ETF is traded on a stock exchange and often tracks a market index or may have a specific investment strategy.Īn exchange-traded fund (ETF) is a collection of securities – stocks, commodities, and bonds, that you can purchase and auction through a broker.ĮTFs are offered in most investment categories varying from traditional investments to alternative investments like stocks or currencies. If you looking for a new investment option to diversify your portfolio, you can consider ETFs.Ĭanadian ETFs are an attractive investment as they are a low-cost option to build a well-diversified portfolio. When stock exchanges are open, ETFs are purchased and traded like company stock during the day. And like the stock, an ETF has its own symbol with information on intraday price which is readily available during the trading day. However, contrary to company stock, the volume of outstanding shares of an ETF changes daily. This is due to the constant creation of new shares and the redemption of existing shares. The constant creation and redemption of shares allow the market price of ETFs to stay in line with their underlying securities. While the primary focus of ETFs is on individual investors, institutional investors also play a major role. #Best performing mutual funds canada how to#.
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