Stats from IFIC and National Bank of Canada show strength of exchange-traded funds in May with a large number of new products launched
Canadian exchange-traded funds remained dominant in May as mutual funds posted another month of withdrawals.
Mutual funds saw $3.8 billion in net redemptions according to newly-published data from the Investment Funds Industry of Canada (IFIC), due to withdrawals from balanced (-$3.8bn) and equity (-$2.2bn) funds.
This was offset by sales of bond ($639m), specialty ($274m), and money market funds ($1.3bn).
Total mutual fund assets were down $40 billion (2.1%) month-over-month to around $1.9 trillion.
ETFs meanwhile, recorded net sales of $2.4 billion in May 2023, as all asset classes gained with the exception of specialty which saw net redemptions of $19 million.
Net sales were recorded in balanced ($134m), equity ($565m), bond ($819m), and money market funds ($1.5bn).
Assets decreased by $6.9 billion or 2.0% compared to April 2023 and totalled $337 billion.
Fixed income leads
Digging deeper into Canadian ETFs in May, figures from National Bank of Canada put total inflows at $2.6 billion.
This was dominated by fixed income with inflows of $1.9 billion with money market products leading. Fixed income has seen more than $9.2 billion inflows since the start of the year, almost double the total for equity ETFs.
Equity ETFs attracted $584 million in May with $640 million for Canadian and $433m for international, more than offsetting the $488m in US redemptions.
There was also a strong month for multi-asset, pulling in $156 million, while inverse/levered saw inflows of $42 million, and commodities added $5 million.
Crypto-asset ETFs posted outflows of $81 million.
RBC iShares, Vanguard, Horizons ETFs, CI GAM, and TDAM were the top 5 for inflows, while BMO and Mackenzie posted small net redemptions.
Big month for launches
May proved a popular month to launch new Canadian ETFs.
There were 27 new products, the most since October 2022, including discount bonds, money market ETFs, target date bond, asset allocation, dividend and thematic equity, and option-based ETFs.
