16 Dec EFT and ETF
EFT and ETF
Barbara McClintock, MA, Certified Translator and Certified Terminologist*
Here’s a way to avoid confusing the abbreviations EFT and ETF. First, let’s look at electronic funds transfers (EFTs). The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) – Canada’s anti-money laundering agency – receives reports on transfers above $10,000. Last year, according to FINTRAC, capital flows out of Hong Kong banks to Canada rose to their highest levels on record with about Can$43.6 billion in electronic funds transfers (EFTs).1.
“The agency has seen a steady increase in overall EFT reporting, consistent with global trends. . . And it’s not just money.”2. Transactions such as transfers via cryptocurrencies between financial institutions or under C$10,000 are not recorded by FINTRAC.
Second, exchange traded funds (ETFs) are purported to have started in Canada in 1990 according to Gary Gastineau, author of “The Exchange-Traded Funds Manual.”3 The first one was called the Toronto 35 Index Participation Units or Tips 35.4 An ETF is a type of investment fund traded on a stock exchange similar to a mutual fund except that it is bought and sold throughout the day and the price varies like shares. Mutual fund transactions, on the other hand, are based on the end-of-day price. ETFs usually track a stock index or a bond index.
Hint: If you remember that the last letter of ETF means fund, you won’t confuse the two abbreviations.
- Sarah Wu, “Hong Kongers shift billions abroad” Montreal Gazette, Saturday, March 27, 2021, p. NP1 https://www.reuters.com/article/us-hongkong-security-canada-insight-idUSKBN2BH3KR
- Canada Calling https://financialpost.com/pmn/business-pmn/canada-calling-hong-kong-residents-shift-billions-abroad-after-clampdown
- and 4. Investopedia https://www.investopedia.com/articles/exchangetradedfunds/12/brief-history-exchange-traded-funds.asp
*The opinions expressed in this article are solely those of the author.