Canada's Public Equities Markets

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CANADA’S PUBLIC EQUITIES MARKETS. YOUR OPPORTUNITY. 21 20
ETFs and closed-end funds: All the stocks that fit
An Exchange Traded Fund (ETF) is a security and investment vehicle that has
attributes of both mutual funds and stocks. Like traditional mutual funds, ETFs
enable investors to access a diversified pool of assets. Like stocks – and unlike
traditional mutual funds – ETFs trade throughout normal trading hours on TSX.
The world’s first exchange-traded, index-linked product was listed on Toronto Stock
Exchange (TSX) in 1990. Since then, popularity of the Canadian ETF marketplace has
grown rapidly, together with the value of its assets. There are currently more than
340 ETFs listed on TSX, with more than $77 billion in assets under management (AUM),
and the number of listings continues to grow. Thirty-six ETFs were added to TSX in
2013, and another 63 new ETFs were listed in 2014. ETFs now account
for more than 20% of total TSX listings.
TSX-listed ETFs offer access and exposure to several asset classes,
sectors and strategies, providing Canadian investors with a wide
range of financial products to help meet their investment objectives.
Whether an investor is bullish or bearish on a particular sector or the
broad market, or seeking an actively or passively managed fund, TSX
has a product to reflect their investment outlook and help diversify
their portfolio. ETFs may track a broad spectrum of Canada’s major companies, for
example, or a qualified selection of small public companies. Some ETFs follow selected
companies within a particular sector such as infrastructure, agriculture, information
technology or healthcare, while others track companies involved with particular
commodities such as gold, oil or natural gas. ETFs listed on TSX also follow indices that
offer exposure to dividends, structured products or currencies.
Some ETFs have evolved beyond passively tracking an underlying index or benchmark
to use futures contracts, index swaps and other derivative products to meet their
investment objectives.
SECTOR OVERVIEW
• 341 ETFs are listed on
TSX, with AUM over
$77 billion
• In 2014, double-digit
asset growth of 14.4%
in the Canadian ETF
market exceeded both
the global growth rate
and that of the U.S.
market
• 211 closed-end funds
are listed on TSX, with a
total market value over
$25 billion
ETF Directory and Screener: find the product that’s right for you
Given the rapid growth in both the diversity and availability of ETFs in the Canadian marketplace,
– Canada’s leading online financial information hub – has created a comprehensive
online resource to help investors better understand the wide range of investment choices available to them.
TMXmoney.com has developed the (tsx.com/etfdirectory) to provide detailed and up-to-date
information about all TSX-listed ETFs. The directory classifies ETFs based on based on asset class, sector and
geographic region, among other search criteria. Investors can also perform advanced searches to collect
more specific information. In addition, to help investors choose what type of product that best suits their
investment objectives, the (tsx.com/etfscreener) conveniently searches for ETFs by asset class,
region, style, size, sector or provider.
Closed-end funds include a broad selection of financial
vehicles, including:
Investment funds: similar to mutual funds, these
vehicles have a specific investment strategy and hold a
wide range of equities, income trusts, commodity and
debt securities
Split share corporations: allow investors to collect
dividends from preferred shares or capital appreciation
from capital shares
Capital trusts: provide investors a return on a portfolio of
mortgages and fixed income securities
Principal protected notes: return the original investment
to an investor, if held to maturity, along with any
investment gains
Generally, these products use funds raised through a
public offering to invest in a portfolio of securities which
may be actively or passively managed. The objective of
most funds is to create an income stream for investors
from dividends, capital gains, interest payments or capital
appreciation from underlying investments.
340+
ETFs ARE LISTED
ON TSX
CLOSED-END FUNDS LISTED ON TSX
There are also over 210 closed-end funds listed on TSX, which have a current market
value of more than $25 billion. Closed-end funds are flexible investment products that
are designed to respond to modern investor needs, from yield enhancement and capital
protection to risk reduction.