An exchange-traded fund (ETF) is an investment fund that holds a collection of investments, such as stocks or bonds owned by a group of investors and managed by a professional money manager. ETFs trade on a stock exchange and can be sold short or margined. You can also trade in futures and options on ETFs.
You buy ETFs from an investment dealer through a full-service or online trading platform.
ETFs trade like stocks. You need to open a trading account with a full-service or online investment dealer to trade them. You can open a full-service brokerage account where an advisor gives you advice and makes trades on your behalf, or a discount brokerage account, where you do the buying and selling yourself without advice. Learn more about trading ETFs.
• Passive management
• Ease of buying and selling
• Low cost to own
Learn more about ETFs on GetSmarterAboutMoney.ca