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TD Asset Management brings decades of experience to the design and portfolio management of ETFs and offers a range of solutions across various asset classes to help investors build strong and well-diversified portfolios.

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ETFs in Focus

For information about ETFs check out one of our related resources or the Q&A below: 

Related Resources:

• General Information
  • Understanding ETFs (pdf)
  • Comparing Exchange Traded Funds to Mutual Funds (pdf)
  • ETFs 101: A Guide for Investors (video)
  • ETF Myths (pdf)
  • When active investment management makes sense for ETFs (pdf)
  • How ETFs are Taxed (pdf)

• Thought Leadership
  • Shedding Light on ETFs (pdf)
  • Keeping track of ETF performance (pdf)

• Regulatory Documents
  • Distribution Reinvestment Plan (pdf)

 
What is an ETF?

• An Exchange Traded Fund is an investment fund that trades like a stock on an exchange and can experience price changes throughout a trading day as it is bought and sold. Some ETFs are designed to track the performance of the underlying index or benchmark. While others are actively managed 
• An index is a statistical measure of a portfolio of stocks or bonds representing a particular market or a portion of it. Some examples of indices are S&P/TSX Composite Index, S&P 500 Index, FTSE TMX Canada Universe Bond Index, MSCI Emerging Markets Index, etc.

What are the costs associated with investing in an ETF?

• Each ETF offered by TDAM will have an associated management fee that covers certain operating costs and expenses. For details, please see the ETFs' prospectus. The management fee and operating expenses make up an ETF's management expense ratio (MER). Additionally, each ETF is subject to brokerage expenses and commissions on its portfolio transactions. Such expenses are not included in the MER of the ETF but are reported separately as a trading expense ratio (TER). Although management fee, operating expenses and brokerage expenses incurred by an ETF are not paid by investors directly, they reduce an ETF's returns.

What fees and expenses are paid by investors directly in connection with investing in ETFs?

• Since ETFs trade like stocks on an exchange, investors may be subject to transaction fees and/or commissions, payable to their brokers or dealers, when they buy or sell ETF shares.

What are some differences between ETFs and conventional mutual funds?

• Liquidity - ETFs trade on stock exchanges and can be bought and sold during the trading day.
• Price Transparency - Investors know intraday the price at which they can buy or sell ETF shares on a stock exchange. For conventional mutual funds, investors do not know the price at which they can buy or sell units in advance as the fund's Net Asset Value (NAV) is calculated at the end of the trading day.
• Trading fees - When an investor places an order for the purchase or sale of shares of an ETF they may pay a trading fee, just like when trading a stock.
• Bid-ask spreads - ETFs trade on the open market like equities, trading at a price near the price of the underlying securities. Like equities, ETFs trade within a price range where investors have posted prices they are willing to buy (the bid) and prices they are willing to sell at (the ask). The difference between the bid and ask prices is called the bid-ask spread. For an investor looking to buy and then sell an ETF (or vice versa) the bid-ask spread should be considered as a cost to transact in an ETF.  At times, the bid-ask spread can be wide which can reduce its cost effectiveness.
• Trade price versus NAV - ETFs trade on exchanges like stocks and can be bought and sold during the trading day. ETFs trade intraday at a price which is likely different than the NAV posted at the end of the day. The trade price could be higher or lower than the NAV. Mutual funds are bought or sold at a specific price (net asset value per unit) at the end of each trading day.

Are ETFs more tax efficient than conventional mutual funds?

• ETFs can be more tax efficient than mutual funds. Both ETFs and conventional mutual funds trigger capital gains and losses when underlying investment are sold, and both need to distribute taxable gains and income to investors each tax year. But because ETFs can be traded among unit holders via the stock exchange, they may require less buying and selling of underlying investments than a mutual fund where all unit purchase and sell transactions need to be processed directly with the mutual fund itself.  Less turnover within the ETF's portfolio can result in lower trading expenses and lower distributions of realized capital gains. That said, investors are responsible for gains and losses realized when they dispose of their investment.

Who should consider investing in ETFs?

• Investors who are considering adding ETFs to their portfolio should evaluate their personal investment goals, knowledge level, day-to-day involvement and time horizon to determine whether an ETF fits their overall investment strategy.

They may be suitable for investors who are:

• comfortable trading on an exchange
• seeking greater liquidity, with the ability to buy or sell intraday

What are the ticker symbols of the TD ETFs?

• Please see below for the list of the TD ETFs and their associated ticker symbols:

ETF	Ticker
TD Canadian Aggregate Bond Index ETF	TDB
TD Select Short Term Corporate Bond Ladder ETF	TCSB
TD Select U.S. Short Term Corporate Bond Ladder ETF	TUSB/TUSB.U
TD Active Preferred Share ETF	TPRF
TD Canadian Equity Index ETF	TTP
TD U.S. Equity CAD Hedged Index ETF	THU
TD U.S. Equity Index ETF	TPU
TD International Equity CAD Hedged Index ETF	THE
TD International Equity Index ETF	TPE

 

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