The ETF winners in Canada in 2019.

As we know, Canadian investors moved a record amount of new monies into ETFs in 2019. And for the second straight year ETFs outsold mutual funds by a wide margin. Let’s have a look at the ETF providers that brought in the most new monies. We’ll also look at the individual ETFs the ruled in 2019. Here’s the ETF winners in Canada in 2019.

For starters please have a read of the Canadian ETF report for 2019, a record breaking year. That post looks at the total assets for 2019 and the recent ETF vs mutual fund trends. Here’s the good news on the last 2 years of flows.

We see that ETF assets are concentrated in several providers in Canada.

And it’s dominated by the top 3.

BMO ETFs attracts the most assets.

For the 9th time in the last 10 years, BMO led the way in new assets. If recent trends continue BMO will overtake iShares at the top provider in Canada. The global leader iShares is ‘struggling’ in Canada to attract meaningful assets. Vanguard continues to make consistent gains. They have such a wonderful brand. Their one ticket asset allocations portfolios are a big hit, and that creates a brand halo, and a lot of great press. Vanguard is often mentioned on popular investment blogs.

Horizons is hanging in there, but had a difficult year. Horizons was hit on two fronts. As you may know Horizons’ tax efficient total return ETFs caught the eye of certain government types. The have recently converted 44 funds to a corporate class structure. Like you, I don’t know the future, but I believe those tax efficient funds have moved to higher ground, safer ground. Many of my readers agree.

And the pot stocks go to pot.

Yes, I warned ya. There is incredible growth potential in the cannabis sector. But it’s going to be a wild ride. Until meaningful profits arrive it is an investment based on hope. Back to government types, they’ve messed this up, terribly. The legalization of cannabis products has uh, not gone smoothly. This puts pressure on Horizons’ suite of cannabis ETFs.

Please have a read of my post on how to invest in the cannabis sector.

And to further demonstrate the challenges for the sector Evolve has terminated two if its cannabis ETFs.

The greatest growth rate belongs to CI First Asset Management. That is so nice to see, CI is of course a mutual fund behemoth. They are more than noticing the winds of change. We can’t say the same for the AGFs and Investors Group’s (IG) of the mutual fund landscape. Down with the ship.

Inflows and outflows.

Here’s the ETF winners and losers in Canada for 2019.

2019 saw a large move to de-risk. We see BMO’s and iShare’s core Bond ETFs lead the way. Cash was popular too. CI was in third place with their high interest savings ETF.

We then see the core Canadian, US and International stock funds rule for the most part. There was certainly some interest in the low volatility equity offerings.

Again, it’s great to see that VBAL one ticket asset allocation fund crack the top 20. The combined Canadian asset allocation ETFs are bringing in monies at a rate of $100 million per month. Again, these are complete game changers. Well diversified portfolios with fees in the range of. 20% to .25%.

BMO Asset Allocation Porfolios.

iShares Asset Allocation Portfolios.

Cost effective Robo …

The Questwealth Portfolios.

Leading the way on monies on the way out is iShares TSX 60 ETF, XIU. Being large and liquid, that fund sees a lot of institutional monies that can greatly affect those flows. That fund is ‘offered’ on the Cut The Crap Investing model portfolio page. Even with higher fees, that fund has outperformed the composite XIC. It’s a bigger bet on the financials.

You may not know that the TSX 60 ETF was the world’s first ETF, launched in 1990. I first invested in that fund in the 90’s. The ETF has been through a few names and owners.

In the outflows we see the rotation out of equities. Those proceeds likely landed in those bond funds and high interest products.

The Canadian investor stock to bond ratio.

As I often write, Canadians sit within that Balanced Growth sweet spot. We added more bonds and cash in 2019 to de-risk just slightly. It’s approaching a balanced mix.

By geography, Canadians still have that Canadian home bias.

We continue to have a preference for North American stocks.

On the bond side we favour Canada, even more.

A December to remember.

Above we see the top flows for December. Is it possible that investors and advisors remembered the market swoon of December 2018? That Grinch market correction wiped out the gains for the year in 2018. We see that savings account lead the way in December of 2019.

We also see some TD ETFs in the mix. That would likely be some internal institutional flows driving those asset number increases. But of course, I will investigate.

Canadian ETF investors feeling kinda smart?

Canadians de-risked slightly. And now we may be in the midst of a stock market correction thanks to the very unfortunate coronavirus threat. That may help investors stay the course. Some investors may put any cash or bond proceeds to work buying those stocks as they go on sale.

And certainly let’s keep in mind that the human tragedy of the virus trumps any investment considerations. Let’s hope this threat is contained as best as possible.

That said, if any move to cash and bonds was an effort to market time, give it a rest. Let’s more than generalize to suggest that market timing does not work. We are best to establish our asset allocation and risk level and embrace a re-balancing schedule or threshold. If stocks and bonds act accordingly, you’ll get the opportunity to sell bonds and buy those stocks on sale. My recent addition of US Treasuries is up some 7% in quick order.

And yes, it’s a good idea to continually gauge your appetite for risk and how your time horizon might affect that portfolio risk level.

Thanks for reading the ETF winners in Canada in 2019. Don’t forget to follow Cut The Crap Investing.

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Dale