Exchange Traded Funds have evolved into a $55 billion dollar industry in Canada, growing more than 30 percent in 2012. The success of ETFs is predicated on more than diversifying risk, minimizing fees and maximizing returns for investors. With over 275 ETFs to choose from in Canada, the breadth of exposure and variety of investment methodologies, empower investors to build dynamic portfolios.
- To provide an all encompassing, unbiased forum for Exchange Traded Funds in Canada
- To deliver content that focuses on education, commentary and analysis for Canadian investors and advisors
- To engage reputable industry participants, including ETF Providers, Index Providers, and other investment professionals, to enhance the knowledge base of Canadian investors and advisors
- To develop proprietary tools that enable investors and advisors to sort and analyze data in order to build and optimize wealth-management strategies
- To ensure the accuracy and integrity of all information provided is done so at the highest standard
- To remain completely independent
The Canadian Exchange Traded Fund landscape continues to evolve rapidly. The growth rate of ETFs witnessed both in Canada and globally, when extrapolated into the next several years undoubtedly has existing players salivating at their financial prospects, and serves to attract new entrants – either looking to defend or enhance their overall asset management franchises, or bring further innovation through the compelling delivery mechanism an ETF represents.
The underlying premise of ETFs is simple – a low cost and efficient way of gaining exposure to the assets that comprise them. The ETF options available differ on many levels, including how the exposure is accessed (physical or derivative based), the potential ramifications of having derivative exposure (counterparty risk), and competing index methodologies used by different ETFs (e.g. market capitalization, fundamental indexing, equal-weighting etc.). The need to understand these characteristics comes on top of all the traditional investing decisions that must be made, including asset allocation, foreign currency exposure, and sector allocation.
ETFs are ideal building blocks for investment portfolios. Investors and advisors will continue to embrace the many favorable attributes ETFs bring to the market, expanding the product offering and propelling the industry to new heights.
Yves Rebetez, CFA