9 months into his tenure, Rohit Mehta discusses the future of Horizons and the ETF industry in Canada
Rohit Mehta is celebrating. The President & CEO of Horizons ETFs took his position in May of 2023, and has subsequently presided over some significant growth for the company. 2023 was Horizons fastest growth year, as the company added $7.5 billion to its AUM. In early 2024, Horizons crossed a significant asset threshold: $30 billion under management. It’s an achievement in the wider context of new leadership and an uncertain economic environment. As he celebrates, Mehta is looking at what’s next for Horizons.
Mehta outlined what he sees driving future growth for the ETF industry as a whole and his company in particular. He highlighted some of the product themes and strategies that ETF issuers like Horizons will be looking to roll out. He emphasized the importance of advisor demand and spoke to where his company may be able to help meet advisor need. On the heels of crossing $30 billion, Mehta was quick to praise the team at Horizons that got them to this point.
“We are simultaneously one of Canada’s largest and fastest growing ETF providers and being able to end the year and start 2024 with that achievement has us excited and ready for the future. Now what went on behind the scenes to make that happen, from launching innovative products that resonated with investors, to building a bigger, stronger and empowered team – that’s what really made it possible. That is also something that we’ll continue to build on this year as we continue our growth trajectory,” Mehta says. “Ultimately, this milestone provides a new foundation for us as we work towards the next big opportunity that’s just over the horizon.”
Mehta views those opportunities in the context of a wider ETF industry that he believes will keep growing. That is due, in part, to the continued uptake of ETFs among Canadian investors and advisors as well as the continued rollout of new product types. He thinks the demand for cashflow will remain high among Canadian investors, whether that’s through fixed income or money market products, or covered call ETFs.
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That doesn’t mean Mehta thinks every issuer will continue to grow. He sees the rise of artificial intelligence as a technological “sink or swim” moment for the industry. ETF issuers, he says, will need to harness AI and other tools like deep data analysis if they want to outperform.
Even as he predicts the ETF industry to grow, Mehta does note that the Canadian ETF space is disproportionately crowded with product. There are over 1,300 ETFs currently trading in Canada, which is just under half of the 3,000 now trading in the US — a country with ten times our population. He thinks there may be some room for simplification on the Canadian product shelf, provided the advantages that investors gain from choice and competition remain intact.
While he works on those future plans, Mehta is also ready to highlight what Canadian investors need right now. That includes ETF strategies that can optimise RRSPs. He noted, again, that income-paying strategies such as asset allocation ETFs with covered call overlays, can work particularly well inside the tax-sheltered structure of an RRSP.
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In addition to the support of their own team, and their parent company — South Korean-based Mirae Asset Management — Mehta attributes much of Horizons’ growth and success to the advisors they work with. He sees the challenges advisors now face, helping clients navigate challenging market environments and changing economic and demographic circumstances. He wants advisors to know that Horizons views them as key to any future growth plans, and they want to deliver a level of service that meets their goals.
“More than ever before, our focus is on delivering exceptional products and experiences for advisors. We have local expertise, the extended strength and reach of our parent company, Mirae Asset, which has over $710 billion in assets under management, and one of Canada’s largest product shelves, that we can leverage for our clients,” Mehta says. “In addition to great products, we’re looking at rolling out new initiatives to support advisors as they grow their practices. We look forward to sharing more on that soon.”
