National Bank has reported a reversal of the flows seen in the previous month
Investors in Canadian exchange-traded funds (ETFs) changed direction in August, preferring equities to fixed income according to new figures from National Bank of Canada (NBC).
With $1.4 billion in new money overall, it was equity ETFs (led by XIU) that gained with $1.1 billion inflows. This was a significant pivot from July when the category saw net outflows of $717 million.
Canadian Equity ETFs posted net inflows of $813 million in August, compared to the $1 billion pull-back seen in the previous month. There were smaller gains for US ($28 million) and international ($244 million) categories.
NBC’s data also shows that while market-cap weighted ETFs for the Canada region were the clear favourite, “low-cost, cap-weighted passive ETFs for various regions like Canada (XIC), international developed (ZEA), and the U.S. (VFV, HXT, ZSP/U) also appeared on the top inflows leaderboard.”
Fixed income falls
The appetite for fixed-income ETFs fell in August to $258 million inflow, following the $1.7 billion net inflows in July.
Cash alternative ETFs were the leader in the category with $589 million, even though some banks have stopped their advisors selling them in favour of their own high-interest savings accounts.
Apart from cash alternatives, fixed income ETFs saw widespread withdrawals.
Canadian corporate bond ETFs saw the largest redemptions ($222 million) while crypto-asset ETFs also saw a significant decline ($217 million), and commodities remained out of favour with a $34 million pullback.
Learn more news about fixed income here.
Year-to-date
In the first 8 months of 2022, Canadian ETFs saw inflows of $19.5 billion, with $10 billion from equities.
The top 3 providers were: RBC iShares, BMO, and Vanguard.
August added just three new ETFs into the mix: UTIL (Horizons Utility High Dividend ETF), TCBN (TD Global Carbon Credit ETF) and HISU/U (Evolve US Savings Account ETF).
