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.

  1. 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
  2. Canada Calling https://financialpost.com/pmn/business-pmn/canada-calling-hong-kong-residents-shift-billions-abroad-after-clampdown
  3. 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.