TD ETFs: The sequel

After a 10-year absence, firm launches six passive funds.

Rudy Luukko 30 March, 2016 | 5:00PM

Ten years after abandoning exchange-traded funds, TD Asset Management Inc. today re-entered the market. Six ETFs, covering major equity categories and Canadian investment-grade bonds, opened for trading on the Toronto Stock Exchange. (See table below.)

The two main characteristics of the new offerings are passive management and low fees. All six are based on market-cap-weighted indexes. Three of them are TD duplicates of ETFs offered by well-established competitors.

TD S&P/TSX Capped Composite Index (TTP/TSX), for instance, employs the same market benchmark as the $1.2-billion BMO S&P/TSX Capped Composite Index (ZCN) and the $2.4-billion iShares Core S&P/TSX Capped Composite Index (XIC). Along with having wider trading spreads than its much larger rivals, the new TD entry is also at a slight disadvantage in terms of management fees, since its fee is two basis points higher than the five basis points that BMO and iShares charge.

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About Author

Rudy Luukko

Rudy Luukko  Rudy Luukko is a freelance writer who contributes to Morningstar.ca on topics involving fund industry trends and regulatory issues. He retired in May 2018 from his position as editor, investment and personal finance, at Morningstar Canada, where he had worked since 2004. He has also worked as an editor and writer for various general, specialty and institutional media, and he has co-authored courses for the Canadian Securities Institute. Follow Rudy on Twitter: @RudyLuukko.

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