Canadian ETF assets continued to grow in August and in 2019 with robust markets and net new creations. At the end of August ETF assets in Canada had surpassed $185 billion. Those are solid numbers but certainly Canadians are still being, well, too Canadian.
Here’s the breakdown courtesy of CEFTA the Canadian ETF Association.
From December of 2018 that’s some very robust growth given the ‘roaring’ Canadian stock markets that hit all-time highs. The Canadian bond markets have also done well; the core universe index bond funds are up over 6.5% year to date. The US and International stock markets have also continued to perform well in 2019.
Here are the net creations for August and some recent history.
Here are the net creations for the month by fund. We see that BMO S&P 500 ZSP is the runaway winner, but that is largely due to an institutional trade according to a National Bank report.
And this from an Advisor’s Edge report …
After a strong showing in July, flows into fixed income ETFs cooled considerably in August, bringing in $148 million. National Bank said this was largely attributable to outflows from Canadian government and corporate bonds, preferred shares and high-yield credit.
(Some outflows from Canadian government and corporate bonds, however, were double-counted due to the BMO Aggregate Bond Index ETF gradually unwrapping its holding, the report noted.)
Commodity ETFs had inflows of $69 million, while multi-asset ETFs brought in $190 million. Nine new ETFs launched during the month, seven of which were multi-asset products with asset allocation, covered call or defined payoff mandates, the report said.
We see the BMO Discount Fund in the top 4 for net creations. Of course that fund will often be held for greater tax efficiency in taxable accounts. And CI continues to make impressive gains. They appear to be quite committed to the ETF options for investors, and hopefully for their existing clients. CI Financial took a majority stake in Canadian Robo Advisor WealthBar, and recently it was announced that they will use the WealthBar technology platform for their Assante Connect offering.
From that Assante blog post …
This new partnership illustrates how CI Financial, the parent company of Assante and WealthBar, is leveraging technology to enhance its products and services throughout its operations.
“What makes Assante Connect distinct is the combination of leading-edge technology and award-winning portfolio management at a competitive price,” said Chris Nicola, President and Chief Technology Officer of WealthBar. “Canadians will benefit immensely from not only the investment expertise, but from knowing that their trusted advisor is always available.
Once again, more evidence that ‘the future’ for the Canadian investment landscape will be that hybrid combination of advice and digital wealth management.
CI has also launched an active Asset Allocation ETF. And adding to these game-changing one ticket solutions, Horizons also expanded its offering with a growth all-equity fund. Their one ticket solutions are part of their tax-efficient total return TRI line up.
Related post: Horizons makes a move to stop the government’s tax grab.
And from that National bank report here’s some insights into flows and asset allocation.
Canadian investors continue with that Canadian home bias. We see those One Ticket Asset Allocation Portfolios deliver one of the strongest growth rates in August and especially year to date. The Vanguard Portfolios are leading the charge.
Stop being so Canadian.
And while this is all great momentum and great news, the headlines south of the border are much more compelling. In fact, US investors have moved the needle to such a degree that ETF assets are now greater than mutual fund assets.
American investors don’t typically face the high fee mutual fund problem that Canadians suffer through. There are many wonderful funds in that .50% MER range. But there they are, being so American and leading the charge in the most effective way to build investment wealth.
All said, let’s celebrate the success in Canada. ETFs are now out-selling high fee mutual funds. And please help the cause, send your friends and family here, here, here, here, here and of course you can send them my way as well. I help, for karma.
Thanks for reading. Your comments and emails are more than welcome. My daughter and I are off to England tonight for a well-deserved grad trip. We’ll visit with family and will certainly do some touring. This is the best part of my semi-retirement stage.
I will be posting and you’ll also see a guest post or two as well over the next two weeks.