True or false? All exchange-traded funds (ETF) are passively managed investments.

Test your knowledge

True or false? All exchange-traded funds (ETF) are passively managed investments.

26th October 2026

Answer: False

While many ETFs do try to mirror a specific index, others are actively managed. The fund manager picks securities, adjusts their weighting and may modify the portfolio based on his or her market analysis. So the defining feature of an ETF is how these investments are traded, not the management style.

To learn more about the different kinds of ETFs and how they work, read this article.

The following sources were used to prepare this article:

Autorité des marchés financiers, “Exchange-Traded Funds (ETFs)”; “Mutual Funds.”

Desjardins Online Brokerage, “What are ETFs?”

TMX, “Toronto Stock Exchange celebrates 35 years of ETF innovation.”