One of my favorite investment types: ETF
NOTE: Surface level look only. Some things have been simplified to keep it beginner friendly. This is a starting point not a reference document.
A diversified portfolio
Now I have mentioned things like savings accounts, GIC's, REIT's and stocks. I love starting off with a savings account but once the money starts coming in then its time to diversify. Diversify just means spreading out into different investments.
Stocks are something people think they should get into but honestly it is a lot of work, research and dedication to do individual stocks well. Plus you need a fair amount of money to purchase sufficiently diversified stocks for a portfolio (group of investments).
Mutual Funds are diversified investments offered by banks.
ETF's are diversified investments offered on the stock exchange.
Both are useful for new investors. Mutual funds offered by banks are good because you get a financial advisor assigned by the bank who will try to get you investments that meet your financial objectives.
The down side?
- You are typically limited to whatever the bank offers and
- Mutual funds often has higher fees involved because everyone needs to be paid.
ETF's on the other hand are just one ticker on the stock market. They typically hold a number of investments inside them so they can be diversified. However, there are a lot of different ETF's and finding the right one (or right few) can be daunting by yourself when new.
Points:
- There are a wide variety and you get no financial advisor
- They typically have lower fees
- You need an investment account to buy/sell them and that may add fees
Deciphering some key terms
However, if you decide to do some looking yourself I'll be deciphering the terms in the ETF Facts of an ETF that I happen to like. I am NOT recommending that you purchase this ETF, in fact as it is leveraged and uses options it is probably NOT for new investors BUT it has a bunch of interesting terms and numbers listed which can be useful to use for reference:
I copied the info sheet I was sent when I purchased the ETF
Quick Facts: (and why they matter)
Date Started: Feb 16, 2022
This fund has only been in operation for 4 years which is very young. Do you trust a new team? new idea? or do you prefer something with a longer track record?
Total Value : $462,662,261
Worth 462 million dollars (almost half a Billion) means that there is a lot of money invested here. It is not some small, niche, fund. Then again it isn't large compared to many others on the stock exchange.
Management Expense ratio: 2.08%
Yes. There are people running this fund and yes they are making money while running it. Currently the amount of money they take as their cut? 2.08%. In this case 2.08% of $462M is about 9.5 million dollars. Just so you know they aren't working for free.
Ticker Information: HDIF
When you are looking up the ETF it needs a name. Harvest Diversified Monthly Income ETF is its full name. Stock exchanges use a quick code. HDIF is the quick code.
Exchange: TSX.....Currency: CAD
Simple but important. This ETF is currently available on the Toronto exchange in Canada (TSX) and all amounts listed are in Canadian dollars. Look up HDIF in New York, London, Hong Kong? It could be a very different investment. Be careful.
Market Price (2025)
To buy/sell: it ranged from $7.17 - $9.12 -- Important because it lets you know how high and low it went. Things go up and down with the current price being $9.02 which is on the high side of things. The $2 difference between high and low shows things varied by up to 22%. Is that high or low to you? Some vary more and some less.
Net asset value: $7.15 - $9.12 -- Shows it trades very close to the price of what it holds in the fund. Since the price matches closely it means you are buying things at a fair price. Sometimes the value is different than the price making it a better or worse deal accordingly.
Fund and Portfolio manager : Harvest Portfolios Group Inc.
Not all investors are created equal. Some are good, some are bad. This tells you who is looking after your money once you purchase.
Distributions: Monthly
Some ETF's pay you money from the investments they hold. This one pays you every month. To figure out how much they pay? You'll have to do more digging. Other investments pay quarterly (every 3 months). Others pay on different schedules or sometimes not at all.
Average daily volume: 298,810 units
On average people are buying and selling almost 300,000 units with a price between $7-9. That means $2 million to $3 million worth get bought and sold daily. For a small investor that means you can buy and sell easily. Then again, if you won the lottery and tried to buy $10 million worth ... It may be a problem.
Number of days traded: 250 of 250.
I have no idea why they would add this. If the stock market was open this ETF was being traded. I suppose it is important for some stocks/etf which have their trading halted because of the stock market stepping in to check out irregularities.
Average BID-ASK spread.
This matters more than you may think. Then you BUY you always pay a little bit more. When you SELL you always get a little bit less. There is always a gap between what someone will pay and what someone will sell.
An average of 0.15% means if you were to purchase and immediately sell $100 worth of stock you would lose $0.15...on average. Very small but not nothing. However, look at this hive-engine token that 
Look at the spread 0.0001 VS 0.0002. In this case if you bought then immediately sold? You would lose 50% immediately! That is huge. IF you could buy $100 worth of AFIT (there actually isn't enough being bought and sold .. see volume above)... But if you could you would pay $100 and then sell for 50 taking an immediate 50% loss. Ouch.
What does the ETF invest in?
This is important because you should know what you are buying. However, before I go into it I'm going to give you an analogy.
If you wanted to get $100 worth of groceries which would you prefer?
- $100 worth of ONE item? (Maybe a whole bunch of Spaghetti?)
- $100 worth of a variety of MEAT? (All meat but different types?)
- $100 worth of a variety of Healthy Food? (A bit of everything but healthy?)
- $100 worth of a variety of Convenience Food? (A bit of everything bot NOT healthy?)
I'm not judging but I am saying that each "basket" has a different flavor and is right for different people.
The very same thing happens for ETFs.
You are getting a basket of stuff.
For this ETF?
The top TEN investments are listed so you can get a flavor for what they hold. In this case they hold a bunch of different ETF's! That means you are getting a basket of stuff and each thing it holds is a basket of different stuff. There is an awful lot of stuff in there.
You can get a flavor of what is there by looking at the Investment mix. Notice the top is "Diversified" at 47%? That means that half of what it has is a bunch of different stuff that is hard to put into categories. Personally I like the shotgun approach with a bit of everything but other people may like banks, healthcare, IT, real estate or others more. Look at the investment mix and you will get a better idea what you are buying.
But there is more in the top 10 list
First: There 12 investments but they only tell you the top 10. Perfectly normal. However, if you had money and wanted to save the MER you could actually buy 12 different ETFs and they are all listed. A fun way to save the MER but also note that each of the HELD ETFs have a MER so you are actually paying higher fees than you might think.
Second: How does 121.3% work?
Most funds will have all their assets add up to 100%. In this case it is 121%. If you look in the writeup above you will see it says Leverage will be crated through the use of cash borrowings.... which means the fund borrows money in an attempt to increase earnings. If they borrow at 5% and earn 10% that means everyone gets extra cash but if they borrow at 5% and earn 3% everyone loses extra money.
That one little number 121.3% means that leverage is trying to earn you a bigger reward but that comes with bigger risk also.
Is that everything you need to know?
Nope. Not at all.
However, by knowing at least what this factsheet says a person can get a better idea of what they are buying. With a little more looking at the top holdings, dividend rates and so on? It means the buyer can be better informed. I'm a huge fan of reading the fine print, doing due diligence and understanding what you are buying.
Hopefully this article gave you a little look into how things are written and why they matter. It just happened to come in my mail today so I thought I would share. Thanks for reading.