Exchange Traded FundsExchange Traded Funds

Exchange Traded Funds (ETF)Exchange Traded Funds (ETF)

Trade just like stocksTrade just like stocks Quick and easy to invest inQuick and easy to invest in Investor has the choice of which asset class to Investor has the choice of which asset class to

invest ininvest in Key differences between ETFs and Mutual Key differences between ETFs and Mutual

Funds are:Funds are: The hours ETFs are tradedThe hours ETFs are traded The price changes of ETFsThe price changes of ETFs

Exchange Traded Funds (con’t)Exchange Traded Funds (con’t)

ETFs are used to reduce firm specific riskETFs are used to reduce firm specific risk ETFs state legal ownership to stocksETFs state legal ownership to stocks An ETF officially begins with a market makerAn ETF officially begins with a market maker

These middlemen assemble the appropriate basket of These middlemen assemble the appropriate basket of stocks stocks

The fund manager takes a small fee of the funds annual The fund manager takes a small fee of the funds annual assets assets

S&P 60 Index Fund - XIUS&P 60 Index Fund - XIU

Comprised of 60 largest and Comprised of 60 largest and most liquid securities on most liquid securities on TSX.TSX.

Suited for individual Suited for individual investor due to the smaller investor due to the smaller contract sizecontract size

Barclays Canada receives a Barclays Canada receives a fee for acting as a trusteefee for acting as a trustee

S&P 60 Index Fund (con’t)S&P 60 Index Fund (con’t)

XIU options allow speculators a better XIU options allow speculators a better opportunity with a limited and known amount opportunity with a limited and known amount of risk.of risk.

S&P Capped Composite Index S&P Capped Composite Index Fund - XIC Fund - XIC

Long-term capital growthLong-term capital growth Comprised of largest and most Comprised of largest and most

liquid securities on TSX and liquid securities on TSX and other ishares fundsother ishares funds

S & P uses industrial S & P uses industrial classifications and guidelines for classifications and guidelines for selecting securitiesselecting securities

10% cap on issuers10% cap on issuers Susceptible to same risks as Susceptible to same risks as

Canadian Equity Fund IndexCanadian Equity Fund Index

S&P Capped Composite Index Fund S&P Capped Composite Index Fund (con’t)(con’t)

Replicates underlying index Replicates underlying index Advantages and disadvantages to thisAdvantages and disadvantages to this

S&P Capped Income Trust Index S&P Capped Income Trust Index Fund - XTRFund - XTR

Comprised of securities of Comprised of securities of income trust issuersincome trust issuers

Securities are selected by S&PSecurities are selected by S&P Replicates the performance of the Replicates the performance of the

S&P/TSX Capped Income Trust S&P/TSX Capped Income Trust IndexIndex

Dividend and capital gains Dividend and capital gains distributiondistribution

Annual trustee fee is 0.55%Annual trustee fee is 0.55% Governed by a trust agreementGoverned by a trust agreement

S&P Capped Income Trust Index S&P Capped Income Trust Index Fund (con’t)Fund (con’t)

Seek to minimize riskSeek to minimize risk Some risks involvedSome risks involved

Sector riskSector risk FluctuationFluctuation

Thank youThank you

Any Question?Any Question?