Exchange-traded funds (or ETFs) are units of a trust which holds a portfolio of securities that is designed to closely track the
performance of a financial market index or sector.  They are listed and trade on stock exchanges in the same way as shares of a
publicly listed company.  The ETF structure allows for a diversified, low cost, low turnover index investment.  The world's first ETF
began trading on the Toronto Stock Exchange in 1990 and there are now hundreds of ETF units available which track most major
world equity, bond, commodity and real estate indexes.
The Benefits of ETFs

The Management Expense Ratio (MER) of an ETF is generally much lower than that of a comparable mutual fund.  There
are also no redemption fees or deferred sales charges when an ETF is sold.

Most ETFs offer broad levels of portfolio diversification because they are comprised of all the securities that are included in
a market index.

ETFs offer a high level of transparency which means that the holdings, structure, costs, distribution policy and daily trading
volumes are known at all times.

ETFs are highly tax- efficient since trading of securities held in the units only occurs when there are changes made to the
underlying index that the ETF tracks.  As a result, ETFs generally have a much lower turnover of securities in their
portfolios compared to most actively managed mutual funds.

Some ETFs allow the taxation of income that is distributed from their underlying investments to be deferred until the ETF is

A Comprehensive Guide to ETFs

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