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  • Published: October 21, 2025

  • Investor Knowledge    5 minutes  

    The Rise of ETF Series in Canada

    Bridging the gap between ETFs and mutual funds

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When Canadian investors think about building wealth, two investment options usually come to mind: mutual funds and exchange-traded funds (ETFs). Both options have unique features and benefits that can impact an investors’ decision when trying to determine which option is more appropriate for their needs and goals.

But what if there was an option that combined the benefits of both?

Enter the ETF Series - an innovative structure that combines many key benefits of both mutual funds and ETFs. First introduced in Canada in 2013, ETF Series have grown steadily as investors and advisors recognize their potential as a flexible, efficient way to access familiar strategies.

What Exactly Is an ETF Series?

At its core, ETF Series is not a brand-new fund but rather a different way to access an existing mutual fund. The underlying portfolio remains the same, but instead of buying units directly from the fund company, investors can trade them on a stock exchange — just like an ETF.

Think of it as opening a new door to the same house: the furnishings inside don’t change, but the entrance (and the experience of getting in) gets an upgrade.

The Appeal of ETF Series

ETF Series were designed for investors who want the professional oversight of mutual funds but also value the flexibility and transparency of ETFs. Some of the key advantages include:

  • Intraday Liquidity: Unlike mutual funds, which only settle once per day, ETF Series can be bought and sold throughout the trading day

  • Performance History: Since ETF Series are linked to existing funds, investors can review historical data rather than starting with a “blank slate”

  • Cost Efficiency: Fees are generally in line with F-Series mutual funds, making them accessible to a wider audience

  • Simplified Tax Reporting: Investors receive a single annual slip, keeping year-end reporting straightforward

Key Considerations

While ETF Series offer many advantages, they also come with nuances that investors should be aware of:

  • Bid/Ask Spreads:
    Depending on market liquidity, execution costs may vary

  • Limited Tax Efficiency:
    Unlike traditional ETFs, ETF Series may not fully benefit from in-kind redemption strategies that help minimize taxable events

  • Less Frequent Disclosure:
    Active ETF Series typically disclose holdings quarterly, like mutual funds, rather than daily like most ETFs

A Growing Role in Canadian Portfolios

ETF Series are still relatively new in the broader investment landscape, but their adoption in Canada is accelerating. They represent a compelling evolution in investment access: They don’t replace mutual funds or ETFs, but they give Canadian investors a new option to balance cost, flexibility, and professional management.

As more fund companies embrace this structure, ETF Series are poised to become an increasingly important part of the investment toolkit, bridging the gap between the familiar and the innovative.

Mutual Funds vs. ETF Series vs. Standalone ETFs

Feature

Mutual Funds

ETF Series

ETFs (Standalone)
Structure Traditional pooled investment Exchange-traded version of a mutual fund Independent ETF
Trading End-of-day price (NAV) Intraday on exchanges Intraday on exchanges
Liquidity Daily Intraday Intraday
Order Types No market orders Market, limit, stop orders Market, limit, stop orders
Fees Varies by series Typically aligned with F-Series Often lower than mutual funds
Tax Reporting May Require Multiple Slips One annual slip One annual slip
Holdings Disclosure Quarterly Quarterly Daily (passive) or quarterly (active)
Execution Costs Shared across all series Shared across all series Externalized via bid/ ask spreads

The information contained herein has been provided by TD Asset Management Inc. and is for information purposes only. The information has been drawn from sources believed to be reliable. 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. Commissions, management fees and expenses all may be associated with investments in exchange-traded funds (ETFs). Please read the prospectus and ETF Facts 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. Unlike a traditional mutual fund ("Fund"), exchange-traded series ("ETF series") are traded on stock exchanges. The trading price of the ETF series will fluctuate in accordance with changes in the market supply and demand on the exchange or marketplace on which the ETF series are traded. In the event of a disruption or a halt in trading of the ETF series on a stock exchange or marketplace on which the ETF series of the Fund are traded, the trading price of the ETF series may be affected. As a result, the disruption or halting of such trading may cause a performance variance between the ETF series and the Fund because the ETF series may trade in the market at a premium or discount to the net asset value (NAV) per unit of the Fund. There can be no assurance that the ETF series trading price will behave similar to the NAV per unit of the Fund. As such, the performance between the ETF series and the Fund may vary. In addition, there are other factors that could lead to performance variances between the ETF series and the fund, such as, for example, brokerage commissions and HST. Certain statements in this document may contain forward-looking statements (“FLS”) that are predictive in nature and may include words such as “expects”, “anticipates”, “intends”, “believes”, “estimates” and similar forward-looking expressions or negative versions thereof. FLS are based on current expectations and projections about future general economic, political and relevant market factors, such as interest and foreign exchange rates, equity and capital markets, the general business environment, assuming no changes to tax or other laws or government regulation or catastrophic events. Expectations and projections about future events are inherently subject to risks and uncertainties, which may be unforeseeable. Such expectations and projections may be incorrect in the future. FLS are not guarantees of future performance. Actual events could differ materially from those expressed or implied in any FLS. A number of important factors including those factors set out above can contribute to these digressions. You should avoid placing any reliance on FLS. TD Mutual Funds are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank and are available through authorized dealers. TD ETFs are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank.

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