Are there too many ETFs?

Despite complaints of being overwhelmed by choice, investors have largely stuck to the conventional.

Jess Morgan 29 November, 2016 | 6:00PM
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Canada's first exchange-traded fund (ETF) arrived on the Toronto Stock Exchange in 1990. Today, there are 400 ETFs on the TSX and over 1,900 listed on U.S. exchanges. According to Karl Cheong, head of ETFs at Toronto-based First Trust Canada, investors are feeling more pressure than ever to choose wisely.

"Across the country, the common pushback I get about ETFs is that there is too much out there," Cheong says. "With very specific niche ideas, [they ask] if these ETFs are really needed."

Mark Noble, head of sales strategy at Horizons ETFs, agrees with those who believe there are too many ETF choices on the market. "But I don't necessarily view that as a negative," he adds. "The market is always changing, and as we've seen with ETF launches, particularly over the last couple of years, we're starting to see them become more refined."

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About Author

Jess Morgan

Jess Morgan  Jess Morgan is the associate editor of Morningstar Canada’s website. She began her career as a television producer and freelance writer, often making appearances on TV and radio as a commentator on politics and culture. She holds a BA in communications from the University of Winnipeg and a diploma in Creative Communications from Red River College.

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