Canadian ETFs ended Q1 with $14 billion in flows

Canadian ETFs had $4.8 billion in net flows in March, led by Canadian equities and fixed-income ETFs.

According to National Bank Financial’s ETF report for March, Canadian ETFs concluded the first quarter of 2022 with $14 billion in flows.

Equities ETFs led the pack in March with $2.5 billion of inflows. Of that, more than half ($1.3 billion) went into Canadian equity ETFs. U.S. equity ETF inflows totalled $502 million and international equity ETF inflows were $658 million.

Inflows were “broad-based” across different equities strategies, the report said. Sector ETFs had the highest inflow among all equities categories, particularly for energy (specifically, the iShares S&P/TSX Capped Energy Index ETF) and financials (the BMO Equal Weight Banks Index ETF).

The iShares S&P/TSX Capped Energy Index ETF March inflow of $332 million was the product’s highest since it launched in 2001. The energy sector registered a record inflow of $541 million in March.

Fixed-income ETFs saw inflows of $1.6 billion in March — the highest so far this year — due to creations in Canadian aggregate and U.S. bond ETFs, the report added.

“As rates rose precipitously in both Canada and the U.S. following hawkish central bank action, both short-term and long-term bond ETFs suffered outflows while broad/mid seemed to be a safer place to be,” the report stated. “Zooming out to the first quarter, we observe that fixed-income inflows were not evenly spread; riskier categories like Canadian corporate bond, foreign bond, and preferred share ETFs lost assets.”

Commodity ETFs saw outflows of $47 million in March, led by gold bullion ETFs, the report noted. Commodity ETFs concluded the first quarter with $284 million in redemptions.

Conversely, cryptoasset ETFs saw $401 million in inflows, “their single largest net flow in the past four months,” the report said. This was attributed to “bouncing prices” for both Bitcoin and Ethereum.

“The up-swinging prices of both Bitcoin and Ethereum may have drawn inflows from ‘performance chasers’ into this category,” the report said.

Canada-listed ESG ETF inflows were $391 million in March, bringing first-quarter inflows to $997 million.

BMO Global Asset Management ($1.4 billion) and Horizons ETFs Management (Canada) Inc. ($1.2 billion) were the providers with the most inflows in March.