January brought over $4 billion flow in inflows across all asset classes, as well as a flurry of new launches
Canada’s ETF industry started the new decade on a high note — to the tune of $4.1 billion.
According to a new report from National Bank of Canada, Canadian ETFs soaked up $4.1 billion in inflows in January, marking their third consecutive month of inflows exceeding $4 billion.
Equity ETFs took in $1.5 billion, with $805 million going to US equities and $926 million into international equity ETFs; Canadian equities, meanwhile, saw a $185-million outflow, driven by $356 million in redemptions from the iShares S&P/TSX 60 Index ETF.
“Thematic equity ended the month with the highest inflow as percentage of starting assets,” the report said, noting high percentage inflows into themes such as marijuana and ESG.
Fixed-income ETFs emerged as a clear champion, attracting $2.125 billion as Canada aggregate bond and cash-alternative “savings account” ETFs saw continued large monthly inflows. A long-term U.S. Treasury ETF, ZTL, as well as a mid-term U.S. investment-grade corporate bond ETF, ZMU, were among the top ETFs in inflows, contributing to a strong performance by U.S./North America bond ETFs.
Multi-asset ETFs attracted $448 million in inflows, with asset-allocation and market-neutral strategies being the most popular. Inverse/levered ETFs registered net outflows of $44 million.
January was also a frantic month for launches, with 25 additions to Canada’s ETF universe. BMO was the heaviest contributor, adding 11 new ETFs that helped drive $2 billion in inflows, the largest among all Canadian providers for the month.
Among BMO’s new offerings were seven ESG-focused ETFs, which also made the first month of 2020 the biggest for new ESG launches since March 2019.
Russell Investments made its debut in the space with four active ETF series based on key mutual funds. CI First Asset also introduced five ETF series of existing mutual funds, all of which fell under the umbrella of liquid-alternative funds.
CIBC came in with one new asset-allocation ETF, as did Vanguard. Fidelity introduced two of its own, one Canadian strategy and one global, which both aim to provide monthly high income. Harvest, meanwhile, supplemented its shelf with a new active bond ETF.
