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ETF frequently asked questions

What exactly is an exchange-traded fund?

An ETF is a pooled security that typically holds a basket of different stocks or indices (like a mutual fund) but they’re traded on an exchange (like a stock).

ETFs first appeared on the markets in the 1990s, and in fact they were invented by Canadians on the TSX! There were only a few available in the beginning, but long-term investors flocked to them – attracted by the balance they offer and the low fees. By the early 2000s, there were over 200 ETFs. Today, there are thousands.

What’s the difference between an ETF and a mutual fund?

There are two main differences. The big one is fees. The MERs (management expense ratios) for an ETF are usually much lower than a comparable mutual fund.

The other benefit is you can trade ETFs just like a stock any time the markets are open (including pre- and post-market), while mutual funds are traded once a day at the most (and some only trade once a week or once a month).

How do I trade ETFs with Questrade?

ETFs are traded just like stocks: right in your IQ trading platform. Plus, any service or tool we offer for stocks is available for ETFs, everything from research to market data, from executing a trade to registering for our free DRIP program. And any time you buy any North American-listed or Questrade Smart ETF™ in one of our Questrade IQ trading platforms, they are absolutely commission-free. When you decide to sell the ETF, you’ll pay the standard commission.

When you say buy ETFs for free, what do you really mean?

We mean buy ETFs commission-free. ECN fees may still apply, but you won’t pay a nickel of commissions when you buy ETFs with Questrade. If you decide to sell the ETF, you’ll pay the standard commission.

For clients trading in an RESP, you’ll be charged a flat, $5 fee on any day that you trade U.S. securities, ETFs included. This is a flat, per-day fee, no matter how many trades you make.

What makes Questrade Smart ETFs™ so special?

Questrade Wealth Management believes investors deserve access to ETFs that go beyond basic index investing. Questrade Smart ETFs™* are strategically designed to do exactly that. Whether they are equal-weighted, Canadian dollar hedged or actively managed, these ETFs provide investors with a low-cost alternative to mutual funds while maintaining diversification to manage risk. They’re also listed on the TSX, and you can buy them commission-free.

*Questrade Smart ETFs™ are a product of Questrade Wealth Management.

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