The ETF Investing Wave

A comparison of Exchange Traded Funds to Mutual Funds, Stocks, and Fixed

Income

What is an ETF?Can james remake in windows Paint?

ETFs Are Nothing NewThe First Ever ETF was listed on the Toronto Stock Exchange in 1990. It gave investors access to the 35 stocks on the TSE 35 Composite Index. In 2006, the fund changed to its current name, the iShares CDN S&P/TSX 60 Index Fund (email iShares for full performance history)

Major ETF Issuers in Canada

ETFs vs Stocks

• Every ETF has a symbol (like Apple has AAPL)

• All ETFs trade on a stock exchanges (like the TSX or NYSE)

• You can buy and sell at any time during the trading day

• ETFs provide one stop diversification• Stocks have no embedded MER• At at stock level, individual companies can

be included or not.

Mutual Funds vs ETFs

• ETFs are generally lower cost than their closest mutual fund equivalent

• You can sell your ETF at any time of day• You are never responsible for other

investor’s tax liability• Mutual Funds give the opportunity for active

management.• Some mutual funds have long track records• ETFs can trade when the underlying markets

are closed

ETFs vs Fixed Income

The 8 Distinctive Characteristics of ETFs turn into chart

• Cost Savings• Liquidity• Diversification• Transparency• Access to alternative strategies• Ideal building blocks for a portfolio• Currency Hedging• Tax Efficiency

Costs Savings• ETFs generally have a lower MER

compared to many actively managed mutual funds.

• Passive Versus Active

• In the chart above, investors can access their strategy is accessed through an ETF structure or mutual fund structure as the fee’s to the manager will general be equal

Costs Savings

Pie chart sector breakdown

Diversification

Show Holding of iShares ACWI index 

Diversification update prices

Transparency

Access To Alternative Investment Strategies

Managed Futures

Managed Volatility Commodities

Inverse Hedge Fund Replication

Inflation Protected

Bonds

Access To Wide-Range Of Sectors And Global Exposure

All World ETF

Developed World ETF

U.S. ETF

Technology ETF

Semi Conductor ETF Software ETF

Healthcare ETF

Japan ETF

Emerging Markets ETF

Currency Risk

Buying a Mutual Fund

Things to Watch For in ETFs

• Issuer has a strong reputation• Liquidity• Bid/ask spread• MER• Methodology

Remember, ETFs are not a strategy. They are an investment

vehicle

Conclusion

• There are similarities and differences in the structure of the investment vehicles we discussed today

• There are advantages and disadvantages to each of them

We welcome your questions…

The Morton GroupFor investors seeking professional assistance through Advisor Managed Discretionary ETF portfolios, The Morton Group of Wood Gundy would be pleased to discuss your personal investment situation. We can be reached at;Tim Morton, CFA, First Vice President, Investment Advisor, Portfolio ManagerJames Morton, CIM, Investment Advisor, Associate Portfolio Manager150 Bloor St. W., Suite 501, Toronto, ON M5S 2X91 800 387-1865tim.morton@cibc.ca • 416 369 8792james.morton@cibc.ca • 416 369 8166www.cibcwg.com/web/tim-morton/the-morton-groupTwitter: @MortonGroupWG

About the Morton Groupof CIBC Wood Gundy

For the past 35 years, The Morton Group has managed the wealth of High Net Worth Canadians. Our focus is on building and preserving the real value of client assets. Whether investors are accumulating or protecting wealth, the priority is to have their capital work efficiently with portfolios that are established to deliver the desired level of annual income and capital appreciation. Tim Morton, CFA, Investment Advisor, Portfolio ManagerAs Portfolio Manager, Tim is the senior advisor in management of our ETF strategies. The development of the Morton Group ETF platform began in 2007 during Tim’s tenure as Chief Portfolio Manager of CIBC Wood Gundy James Morton, CIM, Investment Advisor, Associate Portfolio ManagerJames co manages client portfolios. In addition James provides customized client reports and leads the group’s research activities. The Morton Group discretionary ETF strategies are monitored, traded and reconciled by James.