ETFs tend to charge lower expenses than many other diversified investment options. Lower costs mean that more of your money is working over the long term.
Exchange Traded Funds (ETFs): Simplicity, Versatility and Low Cost
If you are looking for a lower cost, transparent, easy to understand, diversified investment product that offers you the flexibility to trade when you want, then Exchange Traded Funds (ETFs) may be for you.
The increasing popularity of ETFs results, in part, from their simplicity. An ETF tracks as closely as possible the performance of its benchmark by purchasing all or a representative sample of the securities that make up the index. When investors purchase a unit of an ETF, they participate in the performance of the index. ETFs are listed on stock exchanges and are treated like a publicly-traded security – that is, you can buy or sell them throughout the trading day.
ETFs offer several advantages:
An ETF investor can view the current trading price of an ETF at any time during the course of a regular trading day.
Most ETFs can be bought and sold at current market prices at any time during the trading day. Buy when you want; sell when you want.
By aiming to replicate a specific index, an ETF essentially incorporates all or a representative sample of the securities that make up that index, regardless of the number of securities involved. This offers investors lower portfolio variability and can reduce the impact that volatile markets can have in terms of rising and falling prices, especially when compared to holding the individual securities within an index.
ETFs do not have to carry cash in anticipation of redemptions. This saves the fund trading costs and ensures it is fully invested at all times. It also helps minimize the ETF's tracking error against the underlying benchmark.
How they work:
- When investors purchase units of an ETF, they participate in the performance of the index.
- ETFs are listed on stock exchanges and treated like publicly-traded security – so you can buy or sell them throughout the trading day.
Types of ETFs to choose from
BMO ETFs
BMO Financial Group has expanded its line up of Exchange Traded Funds (ETFs) to 55 covering most of the major global asset classes. BMO ETFs help you broaden your investment exposure and diversify your risk. To learn more, please visit the BMO ETFs site.
Horizon BetaPro
BetaPro provides 76 exchange-traded funds. For more information, please visit the Horizon BetaPro website.
iShares ETFs
iShares™ funds offer over 125 equity and fixed income funds worldwide. To learn more, please visit the ETFs basics page of the iShares website.
Learn more about how to evaluate ETFs.
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Important Legal Notice: Commissions, trailing commissions management fees and expenses all may be associated with exchange traded funds/mutual fund investments. Please read the prospectus before investing. Exchange Traded Funds/Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
