Exclusive Q&A
Elliot Johnson, Chief Investment Officer & Chief Operating Officer, Evolve ETFs
Elliot, thank you so much for joining us today.
First of all … this is not paid promotional content. Our existing subscribers know me well but we are adding thousands of new subscribers by the month it seems. Evolve did not request this Q&A nor was there any compensation. Also, this interview is for discussion and educational purposes only to raise awareness and is not considered as investment advice. Always consult your Certified Financial Planner or Accredited Investment Advisor when considering any investment decision.
Let’s just start off with a little Investor 101 before we dive into things.
I tend to think of an ETF as a “cousin” to a mutual fund. What is the distinction between the two and what is the attraction of choosing an ETF over a mutual fund?
Great question!
In actual fact, an ETF is a mutual fund. An ETF is just a special kind of mutual fund that can be purchased on a stock exchange just like a regular stock. Both ETFs and mutual funds can invest in the same sorts of assets, typically stocks or bonds, and both are available for purchase by the general public
ETFs do, however, have some special features:
For one, they are much easier to use as they are available on the stock exchange. You can buy and sell the same ETF in a single day and you always know the price. A mutual fund, however, is only available for purchase at the end of each day.
In addition, ETFs typically charge a lower fee because they are more efficient. Often an ETF will track an index (known as a passive ETF), but actively managed ETFs are growing in popularity and compete directly with actively managed mutual funds but usually for a lower fee.
These cost differences and ease of use are reasons why ETFs are now outselling mutual funds in Canada. We believe it is a superior investment solution better suited to the digital world.
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