A basket of investments.
One ETF can hold many companies at once.
Long-Term ETFs for Canadians
3 ETFs Canadians Should Understand
XEQTGlobal
VOOS&P 500
XAWGlobal ex-Canada
Choose your level
ETF BASICS
5 ETF basics.
Five ideas to understand before we look at XEQT, VOO and XAW.
Where can it invest?
One country — or markets around the world.
It can grow.
Share-price gains and dividends can contribute to total return.
It can fall too.
If the investments inside fall, the ETF can lose value.
Example: $10,000 −30% ≈ $7,000It has ongoing costs.
Canada commonly shows MER; U.S. funds may show an expense ratio.
One basket can hold a little of everything.
Apple
Orange
Banana
Berries
One Basket
Different items, together
in one basket.
in one basket.
Apple
Microsoft
RBC
Many more companies
One ETF
Your money is spread
across many companies.
across many companies.
An ETF does something similar with investments.Instead of buying each company separately, one ETF can give you exposure to many companies at once.
You don't own a full share of every company. The ETF holds them as part of one portfolio.
One country — or around the world.
A stock ETF can invest in companies from one country, several countries, or markets around the world.
ExamplesCanadaCanadian companies
U.S.U.S. companies
Developed internationalCompanies in developed markets
Emerging marketsCompanies in emerging markets
Two ways your ETF can make money.
Share-price gains and dividends can both contribute to your return.
Companies grow in valueShare prices can rise
+
Some pay dividendsCash paid by businesses
→
Your total returnThe overall gain or loss from your investment.
Returns are not guaranteed. The investments inside the ETF can also fall in value.
ETFs can fall when the investments inside them fall.
If the companies or markets inside the ETF lose value, the ETF can lose value too.
$10,000You invest
→
-30%Example drop
→
≈ $7,000Value after the drop
A 30% decline is only an example. Some stock ETFs may fall less, while others can fall more.
Your investment is already worth less after the decline. Selling at the lower price would make that loss realized.
ETFs charge a small ongoing fee.
This fee helps pay for managing and operating the fund. In Canada, you’ll often see the MER; for U.S.-listed ETFs, you’ll often see an expense ratio.
What is MER?
MER = Management Expense RatioIt shows the percentage of your investment used each year to cover the fund's operating costs.
Illustrative examples
Example0.10%per year
Example0.20%per year
Example0.30%per year
Different ETFs can have different costs.
Lower ongoing costs mean less of your money goes toward fund expenses.
That’s enough to start.
Now compare what each ETF actually owns.
ADVANCED RESEARCH
Long-Term ETF Research
Choose an ETF and explore the data behind it.
Each dataset shows its own verified as-of date.
Fund data can change — verify the current provider page or factsheet before deciding.
Fund data can change — verify the current provider page or factsheet before deciding.