section header ETF fundamentals
subsection header Management
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Overview of ETF types
While ETFs can be either passively or actively managed, they all trade on an exchange and offer exposure to equities, fixed income or other asset classes.
Most ETFs are passively managed, seeking to track a traditional market-capitalization-weighted benchmark such as the S&P/TSX Composite Index. Index ETFs typically invest in the physical securities that make up an index, however synthetic swap-based index ETFs are also available.
In recent years, an increasing number of actively managed ETFs have become available. These include rules-based alternatively weighted ETFs (often called smart beta or strategic beta strategies), which seek to track non-market-cap-weighted indexes usually in an attempt to outperform the market or manage risk.
Other newer offerings include balanced ETFs, which provide exposure to multiple assets classes and feature regular rebalancing to maintain a desired level of risk.
Global ETF assets now total more than $6.5 trillion, invested in more than 7,430 products.1
1 Source: Vanguard calculations using data from ETFGI, as of June 30 2018.
Basics
Learn the basics of ETFs, including their history, how they compare to mutual funds, what types are available and more.
Trading
Learn about ETF trading, common order types, premiums and discounts, liquidity considerations and more.
Strategies
Learn about strategic and tactical uses for ETFs, including asset and sub-asset allocation, portfolio completion, cash equitization and more.
Commissions, management fees, and expenses all may be associated with investment funds. Investment objectives, risks, fees, expenses, and other important information are contained in the prospectus; please read it before investing. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated. Vanguard funds are managed by Vanguard Investments Canada Inc. and are available across Canada through registered dealers.
This material is for informational purposes only. This material is not intended to be relied upon as research, investment, or tax advice and is not an implied or express recommendation, offer or solicitation to buy or sell any security or to adopt any particular investment or portfolio strategy. Any views and opinions expressed do not take into account the particular investment objectives, needs, restrictions and circumstances of a specific investor and, thus, should not be used as the basis of any specific investment recommendation. Investors should consult a financial and/or tax advisor for financial and/or tax information applicable to their specific situation.
All investment funds, including those that seek to track an index are subject to risk, including the possible loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market. While the Vanguard ETFs are designed to be as diversified as the original indices they seek to track and can provide greater diversification than an individual investor may achieve independently, any given ETF may not be a diversified investment.
All monetary figures are expressed in Canadian dollars unless otherwise noted.