Canadian ETF flows show “flight to safety” in September

Fixed-income ETFs gained $2.3 billion in September, while most other Canadian categories, especially market cap–weighted equities, experienced outflows, says National Bank Financial in its monthly ETF report.

After gaining $1.4 billion in August, Canadian ETFs overall gained $1.9 billion in September, with net inflows into cash-alternative ETFs of $1.7 billion — a record for that category, the report said.

“Fixed-income ETF flows show clear signs of flight to safety,” the report said.

CI High Interest Savings ETF (CSAV) led the way, with inflows for $458 million, while Evolve High Interest Savings Account Fund (HISA) was close behind, with inflows of $453 million.

All but two fixed-income ETF categories saw inflows (the two exceptions: sub–investment grade and preferred/convertible, with outflows of $210 million and $109 million, respectively). Canada aggregate bond ETFs, the top category within fixed income, experienced inflows of $364 million.

Equities funds had outflows of $436 million. Within the category, the U.S. was the only region to have net positive flows ($506 million), while funds from Canada had outflows of $837 million.

By fund focus, market cap–weighted ETFs had the highest outflows (at $753 million).

The iShares S&P/TSX 60 Index ETF (XIU) “displayed its usual institutional activity,” the report said, with outflows of $737 million in September after pulling in $683 million in August. In second place for outflows for a single long fund was the BMO MSCI EAFE Index ETF (ZEA), with outflows of $310 million in the month.

Dividend/income ETFs inflows “remained strong” at $156 million.

Health care and energy ETFs had inflows of $63 million and $62 million, respectively, while materials ETFs had outflows of $57 million.

Crypto ETFs had outflows of $81 million, with the 3iQ CoinShares Ether ETF (ETHQ) experiencing outflows of $91 million.

The month was a busy one for launches, with 28 new ETFs, including 15 ESG ETFs.

In total, $21.2 billion has flowed into Canadian-listed ETFs this year, the report said.

Staff

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