TD Exchange Traded Funds (ETFs)
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.
ETFs in Focus
For information about ETFs check out one of our related resources or the Q&A below:
- General Information
- Regulatory Documents
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:
|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|
The information contained herein has been provided by TD Asset Management Inc. (“TDAM”) and is for information purposes only. The information has been drawn from sources believed to be reliable. Where such statements are based in whole or in part on information provided by third parties, they are not guaranteed to be accurate or complete. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. TDAM, The Toronto-Dominion Bank and its affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered.
Commissions, management fees and expenses all may be associated with investments in exchange-traded funds (ETFs). Please read the prospectus or ETF Summary Document before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. ETF units are bought and sold at market price on a stock exchange and brokerage commissions will reduce returns. TD ETFs do not seek to return any predetermined amount at maturity. TD ETFs are managed by TDAM, a wholly-owned subsidiary of The Toronto-Dominion Bank.
The TD Canadian Aggregate Bond Index ETF, TD S&P/TSX Capped Composite Index ETF, TD S&P 500 Index ETF, TD S&P 500 CAD Hedged Index ETF, TD International Equity Index ETF, and TD International Equity CAD Hedged Index ETF are not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trade mark or the Index Price at any time or in any other respect. The Solactive Canadian Select Universe Bond Index, Solactive Canada Broad Market Index (CA NTR), Solactive US Large Cap CAD Index (CA NTR), Solactive US Large Cap Hedged to CAD Index (CA NTR), Solactive GBS Developed Markets ex North America Large & Mid Cap CAD Index (CA NTR), and Solactive GBS Developed Markets ex North America Large & Mid Cap Hedged to CAD Index (CA NTR) are calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the TD ETFs. Neither publication of the Index by Solactive AG nor the licensing of the Index or Index trade mark for the purpose of use in connection with the TD ETFs constitutes a recommendation by Solactive AG to invest capital in said TD ETFs nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in this TD ETFs.