What is an ETF?

Exchange Traded Funds (ETF) are funds that trade like a stock. They are an easy-to-use, low cost way to invest your money.

5 ETF Must-Knows

  1. What is the difference between ETFs and mutual funds or stocks?

    • iShares ETFs combine the popular features of both. Like a mutual fund, an ETF is a collection of stocks or bonds. And like a stock, you can buy and sell an ETF throughout the day on the stock market.

  2. What are the benefits of ETFs?

    • Similar to mutual funds, iShares ETFs are diversified mixes of stocks or bonds that are managed by experienced professionals. ETFs typically offer a few extra perks, including lower fees and increased price transparency throughout the day, so you always know what your investment is worth.

      On average, iShares ETFs cost one-fifth the price of a mutual fund.1 The savings an investor can achieve from lower fees can be significant over time.

      iShares ETFs make it easy to invest in a wide array of markets, whether broad like the S&P TSX, in niche sectors, or targeted to a specific goal.

  3. How are ETFs managed?

    • iShares ETFs are overseen by some of the most experienced portfolio managers in the industry. Our fund managers aim to ensure the ETF does what it's supposed to do. This includes closely matching the ETF's benchmark index and keeping its fees low.

  4. How do you buy an ETF?

    • There are two easy ways to purchase iShares ETFs:

      1. Talk to your financial advisor about adding iShares ETFs to your portfolio.

      2. Purchase iShares ETFs directly from any online brokerage account.

  5. How do you use ETFs in your portfolio?

    • ETFs are extremely versatile. Many investors use them to pursue long term goals, such as funding their retirement or growing wealth. Others take advantage of ETFs to help achieve specific goals, such as seeking income or managing against jumpy markets. And those with strong market views use ETFs to seek timely new opportunities, instead of picking individual stocks, bonds or mutual funds.

Investor Tool Kit

 


NEXT: Keep More and Do More


 

1

BlackRock and Investor Economics as of 12/31/14. Assuming asset-weighted average MER of an iShares ETF (37 bps) and asset-weighted average MER of a mutual fund (211bps).

iShares® ETFs are managed by BlackRock Asset Management Canada Limited. Commissions, trailing commissions, management fees and expenses all may be associated with investing in iShares ETFs. Please read the relevant prospectus before investing. The funds are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.

iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. Used with permission.

iSC-1873