Low cost. Tax efficient.
What is an ETF?
An ETF is a collection of stocks or bonds that may be purchased for one price. Unlike mutual funds, ETFs may be bought and sold during the entire trading day just like a stocks on an exchange. Many popular ETFs track well-known stock indexes like the S&P 500 in the United States and the S&P/TSX Composite Index in Canada.
"An exchange-traded fund, ETF for short, is an investment fund that lets you buy a large basket of individual stocks or government and corporate bonds in one purchase. Think of ETFs as investment wrappers, like a tortilla that holds together the component ingredients of a burrito, and instead of tomatoes and rice and lettuce and cheese, these burritos were filled with stocks or bonds and are considerably less delicious to eat with salsa."
What is an Investment Pool?
"Pooled funds are essentially private mutual funds that are sold to more sophisticated investors using an offering memorandum rather than a prospectus. Among the investments available are stock and bond funds as well as alternative-strategy offerings including private equity and debt."
Source: Globe & Mail
Ironically, pooled investments have traditionally been targeted at HNW (high net worth) investors, such as those with $500,000+. At NOW, we have deliberately created the mechanism to bring this approach, typically reserved for the wealthiest Canadians, to everyone. This is in part achieved through our referral arrangements and the use of industry-leading digital wealth management offered through Purpose Advisor Solutions (PAS) & Harness Investment Management.
An investment pool is not entirely different to a mutual fund - however there are some important differences. To give one example, our portfolio manager - BCV Asset Management - has asset minimums of $300,000 per household to open an SMA and provide what we consider a red-carpet portfolio management experience for clients.
BCV, and many other portfolio management firms, can and have created pools of their own portfolio mandates, allowing clients with less than $300,000 to benefit from their expertise and performance record. Pools are a smart way to "democratize" access to professional money management at a much lower cost than mutual funds.
We can bring the BCV experience to ALL our clients through BCV pools using the PAS/Harness digital wealth platform.*
*pending regulatory approval.