Canadian ETF flows break 2020 record with 2 months to go

Canadian ETFs gathered $3.9 billion in October, bringing 2021’s year-to-date inflow to $43 billion, says National Bank in a monthly ETFs report. The total so far this year compares to a record $41 billion last year, and total ETF assets crossed the $300-billion milestone, the report said.

While fixed-income ETFs outsold all other asset classes last month, equities “reclaimed the driver’s seat,” it said, generating $2.6 billion in flows, led by U.S. equity ETFs but spread among regions.

Market cap–weighted passive ETFs ($1.5 billion) and sector ETFs ($356 million) had the highest equity inflows in October, and all sectors saw creations except for energy, which had $55 million in outflows.

While crude oil prices surpassed $80 a barrel, “we occasionally observe contrarian flows in the energy sector as traders either take profits or try to buy the dip,” the report said.

Financials was the sector that saw the most equity ETF inflows in the month, at $170 million.

Fixed-income ETFs had inflows of $457 million — “a retreat from September’s demand surge for safety assets,” the report said. “The sudden rise in the short-term rates in Canada might have driven outflows from related products,” while actively managed alternatives gained assets.

Commodity ETFs had outflows of $93 million in the month from gold bullion ETFs, suggesting investors are hedging inflation risk with other instruments such as other base metals, value factor ETFs or cryptoasset ETFs, the report said.

Cryptoasset ETFs had inflows of $534 million, “a new high in recent months,” it said. The result coincided with the U.S. Securities and Exchange Commission’s approval of the first futures-based Bitcoin ETF stateside.

In Canada, the CI Galaxy Ethereum ETFs (ETHX/B and ETHX/U) and Purpose Bitcoin ETF (BTCC/B) had inflows of $93 million, $82 million and $81 million, respectively, falling within the top 16 funds with the greatest inflows in the month.

The month had three new ETF launches, all from Horizons.

For full details, read National Bank’s monthly ETFs report.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.