Latest ETF flows report shows continued dominance of Canadian equities, leadership of financial sector
Canada’s ETF industry saw strong inflows again last month as investors ploughed $5.4 billion into the space, bringing the 2021 year-to-date record to $48 billion.
According to the latest ETF flows report from National Bank, equity ETFs continued to lead as creations in the category reached $3.8 billion. Canadian equity ETFs soaked up $2.1 billion, while U.S. equity ETFs and international equity ETFs took in $870 million and $843 million, respectively.
Market cap-weighted ETFs were similarly dominant as they attracted $2.2 billion, while flows into sector ETFs were healthy at $602 million. Among sector-focused ETFs, financials stole the show with $798 million, while energy ETF flows receded into $367 million of outflows, which National Bank researchers attributed to investors profit-taking prompted by the sudden decline in crude oil prices..
Fixed-income ETFs saw $308 million in flows, though some sub-categories sustained redemptions. That includes Canadian government bonds, which lost $163 million, and sub-investment grade bond ETFs, which investors pulled $52 million from.
Canadian aggregate bonds registered $248 million in inflows, while inflows into preferred and convertible ETFs clocked in at $136 million. Short-term bond ETFs also had a moment as investors pushed $266 million into the category, while real return fixed-income ETFs posted $100 million in inflows. Long-term bonds attracted $84 million while broad/mixed fixed-income ETFs saw $44 million come in.
Looking at other asset categories, commodity ETFs saw modest outflows of $5 million as precious metals failed to push up in November. Multi-asset ETFs saw some favour as investors placed $474 million into the products.
While crypto-asset prices saw a slight drawdown last month, that didn’t dissuade investors from investing in crypto ETFs. The category absorbed $617 million in November, with ethereum ETFs winning out over bitcoin ETFs in the inflows contest for the month.
The report also made note of a spate of ETF launches last month. Throughout November, there were over 20 ETFs launched across nine providers. Notably, Purpose was the most prolific as it expanded its shelf of crypto ETF offerings, and the race for Canada’s first metaverse ETF ended in a tie between Evolve Funds and Horizons ETFs.
