RRSP eligible exchange traded funds (ETFs)

An exchange traded fund (ETF) is an investment fund which is traded on an exchange. ETFs, like mutual funds, pool together securities to offer investors diversified portfolios. There are, however, several differences between the two.   ETFs tend to be significantly cheaper than mutual funds owing to lower cost trade strategies and reduced overhead costs. Many people think of ETFs as passive investments which replicate an index. There are, however, increasing numbers of ETFs which have portfolio managers who make active investment decisions.

Responsible investment ETFs use best-in-class and sometimes exclusionary screens strategies.

Regarding Equity ETFs, the only Canadian RI ETF is the iShares Jantzi Social Index ETF (XEN). However, there are clean technology and clean energy ETFs which trade on the US market that you may hold in your RRSP. Following is a link to an article providing commentary and identifying a number of green ETFs: http://www.nasdaq.com/article/a-beginners-guide-to-alternative-energy-etfs-etf-news-and-commentary-cm326049

A word to the wise: If you do purchase US-based ETFs, remember that you will be making your purchase in US dollars and therefore assuming foreign exchange risk.

There are no Bond ETFs branded as RI products, although both government and corporate bonds are eligible for inclusion in RRSPs. Municipal, provincial and federal government bonds may qualify as RI products.

Regarding corporate bonds, if you do not want stock of a given company in your Equity ETFs or general portfolio, then you will not want bonds from these companies in your bond ETFs. All ETFs list their full holdings daily on their websites, so it is easy to see what is included in each fund.

Click on the following link for information on a number of RI eligible ETFs: http://www.ethiquette.ca/wp-content/uploads/2014/09/Exchange_Traded_Funds.pdf