National Bank report shows assets moved above $400 billion last month
Investors piled into Canadian ETFs in February, a major month of inflows which saw $6 billion created to take assets to more than $400 billion.
National Bank’s Canadian ETF Flows report reveals that inflows were at their highest level in 11 months. That previous high, in March 2023, was against a backdrop of huge macro changes, U.S. regional bank failures, and rapid shifts in the rates and business environment.
This time, the jump in inflows has been driven by investors loading up on equities which accounted for $4.5 billion of the total created last month and spread mostly between U.S. ($2.8 billion) and International ($1.5 billion) classes. Canadian equity ETFs picked up just $233 million.
Healthcare and utilities were the leading sectors for equities while energy and financials posted small outflows. The seasonal impact of investors boosting RRSPs before the deadline will have contributed to gains for ‘all equity’ portfolio ETFs.
Equity ETFs represent 75% of the nearly $10 billion that has flowed into Canadian ETFs in 2024 so far, a shift from last year when fixed income were dominant.
Meanwhile, fixed income inflows were more than $1 billion, roughly in line with the previous month. This was led by Canada corporate bond ETFs (especially ultra-short term, short term, and target maturity ETFs) which saw $684 million created. Foreign bond and long-term bond ETFs were also favoured.
Money market funds recorded net outflows of $228 million and there was another pullback from crypto ETFs with $99 million outflows, a continuing trend since the launch of spot Bitcoin ETFs in the United States (where US$36.5 billion has flowed since early January, boosted by the conversion of a closed-end fund from Greyscale to an ETF).
Canadian ETF providers who outperformed in February included RBC iShares and Vanguard which each took more than $1 billion while Horizons, CI, and Purpose posted lower numbers than usual because of large exposure to cash alternative or crypto-asset ETFs.
