Canadian ETF investors add over $2.4 billion in May.

Canadian ETF investors continue to add to their portfolios during the pandemic. For May, the Canadian ETF Association and National Bank reported that Canadian ETF investors added over $2.4 billion to accounts. We continue to see robust activity with self directed investors and at the Canadian Robo Advisors. There is also plenty of momentum with advisors moving to digital platforms that take advantage of ETF model portfolios.

National Bank reported another record month for Canadian ETF assets.

And here are some highlights from that report …

Following a relatively quiet April (in terms of inflows), Canadian ETFs gathered $2.4 billion, led by the Equity asset class. International Equity topped the leaderboard, accumulating the greater part of total equity inflows. Fixed Income’s outflow streak finally ended in May with net inflows of $189 million. Investors switched back to Canadian aggregate bonds while corporate bond ETFs suffered redemption pressures. The commodity asset class enjoyed another month of sizable inflows at $110 million, or 8% of its starting assets, as inflows into gold remain strong. The multi-asset ETF category welcomed three new products in May and $193 million in flows.

– National Bank May 2020 ETF Report

I recently had reported that the Balanced Portfolio barely felt a thing in this pandemic. Simplicity worked by way of those one ticket asset allocation ETFs. But we also see the more active ETF investors reacting to market events. Of course we have to be careful in reacting to old news. One interesting development is the continued interest in Gold and commodities. Investors continue to seek protection from inflation and the potential of stagflation. From the report …

Commodity ETFs continued to shine in May, gathering $110 million, or 8% of starting assets. Gold bullion ETFs dominated the inflows, led by iShares CGL.

There’s Gold in them thar portfolios.

Here’s the link to iShares CGL ETF, it provide exposure to Gold Bullion with a currency hedge to the Canadian Dollar. My readers will know that I am a fan of adding some gold and Bitcoin. Many will suggest start at 5% gold. Even 1% Bitcoin has done wonders for the Balanced Portfolio. That is an extremely volatile asset of course; and that’s why 1% might do the trick.

For Canadians, in ETF form Bitcoin is available by way of QBTC.U. That is in US dollars.

As a panelist for the MoneySense Best ETFs in Canada for 2020 I had mentioned Gold and US long term treasuries as potential core risk assets. In that post Jonathan Chevreau liked the idea of a 10% Gold allocation.

I had also suggested Gold and Treasuries on February 1 in how to prepare your portfolio for the coronavirus outbreak. Gold is up some 6.7% from that post. US Long Term Treasuries provided a nice hedge against the stock market volatility. For 2020 the Treasuries were up over 23% when US stocks were at the height of their hissy fit.

That said, thanks to Friday’s surge US stocks have just about clawed their way back to even for the year. In Canadian dollars we’d be back to positive territory.

Canadian ETF investors looking for stock exposure.

But mostly in May of 2020 Canadian ETF investors were adding equities.

There was a near even mix of US and Canadian stock assets leading the way followed by developed and emerging markets. Canadian ETF investors continue to embrace that Balanced Growth Sweet Spot.

BMO continues to chase down BlackRock as the top ETF provider in Canada. But BMO lost some ground in May. Here’s the top 5.

The retail investor has been an accumulator through much of this stock market disruption. In a Cut The Crap Investing guest post this week Leo Gutierrez offered that the coronavirus crisis does not scare the retail investor.

Robinhood investors. Giving to the poor companies?

There are reports of record numbers of account openings at discount brokerages on both sides of the border. The US investment app Robinhood reports that millennials have gone crazy for risk. They must have that ‘be greedy when others are fearful’ quote as a screen saver. In fact Robinhood reports on investor activity in regards to certain stocks.

We see Robinhood investors chasing many of the ‘perfect recovery scenario’ stocks. Everything has to go right. V-shaped economic recovery, miracle vaccine, consumers not afraid to fly, jump aboard the floating petri dishes, visit hotels and join the crowds at Disney World Resorts.

Here’s a must-watch 8-minute video from The Economist. That video details the chain of events that might limit the economic recovery, and why those ‘fun stocks’ might not be much fun for quite some time. Our economic recovery might be limited to 90% of previous levels for quite some time.

More Weekend Reads.

FiPhysician looks at retiring during the pandemic.

On Berman’s Call blog – this is the most expensive US stock market EVER! In that post Larry goes over the valuation levels required for that V-shaped recovery.

But then along comes the jobs creation shocker in the US and Canada. That’s great news. And let’s hope there is more to come and that we can open up economies as quickly and safely as possible. On this front I continue to hang out more often with those that get called Bear.

On myownadvisor Mark takes a timely look at that 4% retirement funding rule. And here’s’ Mark’s Weekend Reads post.

On findependencehub how to break up with the US and the IRS. Save that one for US election time perhaps.

On The Retirement Manifesto Fritz offers what he has learned from 2 years in retirement.

It’s a great read. At times you certainly have to go with the flow. And congrats to Fritz.

At eastsleepbreathefi Chrissy details her new normal.

Here’s a great post from Enoch at savvynewcanadians on COVID-19 benefits for seniors.

Have you deferred your mortgage payments? On lowestrates.ca Ellen Roseman looks at the true cost of COVID-19 payment deferrals.

Thanks for reading. As we open up the economy and loosen up some personal boundaries, don’t forget to respect the virus. Wear a mask when necessary. Keep your distance when possible. Wash your hands more than you’d like to.

Don’t forget to follow Cut The Crap Investing. Folllow me on Twitter @67Dodge.

Check out my writings on Seeking Alpha.

Canada’s top-ranked discount brokerage.

Cut The Crap Investing readers can sign up with another of Canada’s top ranked discount brokerage – Questrade through this partnership link. You can buy ETFs for free, including the wonderful one ticket ETFs. 

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And as always, check out those Canadian Robo Advisors for advice and low fee ETF Portfolios.

Dale