The Globe and Mail explains
...that Exchange-Traded Funds
(ETFs) are a bit like a stock and a
bit like a mutual fund. Like a
stock, you buy ETFs on a stock
exchange through any stockbroker or
online brokerage account. You can
place an order anytime during the
trading day. Like a mutual fund,
ETFs let you invest in a group of
stocks or other investments.
...that an ETF is a security that tracks an index, a commodity or
a basket of assets like an index fund, but trades like a stock on an
exchange. ETFs experience price changes throughout the day as they are
bought and sold.
Because it trades like a stock, an ETF does not have its net asset value
(NAV) calculated every day like a mutual fund does.
By owning an ETF, you get the diversification of an index fund as well
as the ability to sell short, buy on margin and purchase as little as
one share. Another advantage is that the expense ratios for most ETFs
are lower than those of the average mutual fund.
One of the most widely known ETFs is called the Spider (SPDR), which
tracks the S&P 500 index and trades under the symbol SPY.
Mutual Funds: with an ETF, you get the diversification of holding
many stocks, without the negative impacts of large unit holder activity
within your mutual fund.
a) With ETFs held within client named accounts,
you are NOT taxed on gains that are not realized within your own
portfolio; b) there are no taxable distributions from rebalancing within
the ETF and c) there are NO embedded tax liabilities within ETFs - to name a
few advantages of the efficiency of the structure.
RISKY IS AN ETF?
Exchange-Traded Funds (ETFs) help
investors diversify with a mix of
investments, they reduce the
and risk often associated
with individual stock selection. And in most cases,
you will only do as well as the
underlying market. The ETF
gives you exactly what it is
designed to do - the market!
want to better manage portfolio risk
and your returns within your
portfolio, you require professional
global advice and active management appropriate to your life
stage requirements and
investment mandate. Investment risk
is then managed by positioning ETFs
within your portfolio considering country, region, sector,
style and currency. The ETF itself is a
stable "tool" and is a trillion dollar
industry embraced by institutional
and private investors alike from around the globe.
ACTIVE MANAGEMENT using ETFs?
By design, the ETF will deliver the
market's return with less volatility
relative to individual stock
selection, and without the expense
of a mutual fund. Adding
expert advice optimizes your
exposure or allocation between the
many markets. Using multiple
ETFs within your portfolio the
manager's expertise is to deliver
true diversification, with less
volatility, less cost and better
ETFS ARE NOT NEW - ACCESS TO THEM IS.
Why continue to take unnecessary risk?
It is time to
learn more about ETFs and the many benefits of actively managed ETF Portfolios.
By reducing risk, you can increase returns.
Take a moment today to
information about our "Top of the Hill" approach
to Private Client Wealth Services,
call toll free (877) 769-3769
BRAEHEID MANAGEMENT - bringing you the next phase of
Private Client Wealth Services.