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Event Review: Horizons Exchange Traded Funds – ETF 101: An Introduction to ETFs

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September 19, 2012

Published September 19, 2012 05:55 PM

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    Key points

    This event was a presentation by Horizons Exchange Traded Funds, on the basics of exchange traded funds and was held at the TD Waterhouse Investor Centre in downtown Vancouver.   The seminar itself was just over an hour long and provided a great overview on what ETFs are, how they compare to stocks and mutual funds, […]

    This event was a presentation by Horizons Exchange Traded Funds, on the basics of exchange traded funds and was held at the TD Waterhouse Investor Centre in downtown Vancouver.   The seminar itself was just over an hour long and provided a great overview on what ETFs are, how they compare to stocks and mutual funds, how they are actually traded and what some of the advantages and disadvantages are of particular types of ETF products.  All in all, it was an informative session provided by a knowledgeable speaker on the topic.   As this was a presentation from a company outside of TD Waterhouse, there was no direct reference to TD Waterhouse products or services, and was thus an opportunity to learn about ETFs in general and Horizons’ products in particular.

    Some of the most interesting points presented were around the cost structure of ETFs as well as the ETF industry in Canada and around the world. The relatively low cost of using index ETFs versus the equivalent product in a mutual fund where management fees can be three or four-fold higher in the latter were discussed.  Whether you are a deal hunter or not, the ultra-low management fees (0.07%) of some index ETFs are something worth taking notice of.

    This presentation also had an interesting section on the role of market makers in trading ETFs and gave some eye-opening stats on this US$1.5 trillion dollar industry.  In addition to the Horizons Exchange Traded Funds family, other major players in Canada include iShares and BMO with Horizon’s claiming 7% of the ETF market share overall in Canada.

    Horizons Exchange Traded Funds offered audience members a few great tips to close out the presentation including:

    1. Use limit orders instead of market orders to improve the chances of getting an order filled at the desired price
    2. Use stop losses to ensure disciplined exits
    3. Avoid trading the opening and closing 15 minutes of the market
    4. Take a look at the depth of ETF orders before executing a trade

    To learn more about Horizons ETF family of products, you can find their website at http://www.horizonsetfs.com  and if you’re interested in attending one of their upcoming seminars, they’re listed on their events page here.

    If you are interested in learning more about ETFs, you can watch a couple of introductory videos here (10mins) or here (60mins)

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