Exchange
Traded Funds (ETFs)

Exchange Traded Funds (ETFs) are an easy-to-use, low cost way to invest your money. An ETF can provide you with access to a diversified portfolio of stocks or bonds in a single investment that trades just like a stock. If a single stock or bond in the collection is performing poorly, there is a good chance that another is performing well, which helps minimize your losses. On the other hand, when you buy individual stocks and bonds, if one declines in value, your savings could experience a much more significant decline in a short period of time.

By definition, an ETF is a collection (or “basket”) of tens, hundreds, or sometimes thousands of stocks or bonds in a single fund. Similar to mutual funds, ETFs are not only diversified, but are managed by experienced professionals. Exchange traded funds have now been available to investors for over 25 years. It all began with TIPS, the first ETF that was created and traded on the Toronto Stock Exchange in April 1990.

An ETF is traded on a major stock exchange—like the New York Stock Exchange or Toronto Stock Exchange. 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. If you have ever traded an individual stock, then buying and selling an ETF will feel familiar because it’s traded the same way.

Finally, with the tremendous growth associated with ETFs, investors should be aware there are “costs” associated with the benefits of ETFs. Before you invest, you should do your due diligence to understand the structure of the ETF and its associated risks and tax implications.

ETFs Explained

Source: BMOcommunity

Security Financial Services & Investment Corp. is one of the first registered Mutual Fund Dealers in Canada to provide ETFs to its advisors and clients alike. As a result, we have partnered with the industry leaders to ensure advisors and clients have access to world-class management and performance. ETFs are provided by B2B Bank.