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ETFs 101

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ETFs can be a good way to reduce your investment costs, but some types can be riskier than others. Find out how ETFs work.

ETFs 101

How ETFs work

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.

ETFs 101

How ETFs work

You buy ETFs from an investment dealer through a full-service or online trading platform.

ETFs 101

Trading ETFs

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.

ETFs 101

Here are a few key reasons why people invest in ETFs

• Diversification
• Passive management
• Transparency
• Ease of buying and selling
• Low cost to own

ETFs 101

Learn more about ETFs on GetSmarterAboutMoney.ca

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