ETF inflows surpass last year with one month to go

Canadian ETF inflows have already surpassed those of last year, with another month yet to go in 2020.

November ETF inflows were $2.9 billion, National Bank Financial Inc. said on Wednesday in a monthly report. That compared to $1.7 billion the previous month, and brought year-to-date inflows to $37 billion.

That total surpassed last year’s record-breaking $28-billion annual inflows by almost 35%, the report said.

Equity ETFs accounted for inflows of $1.9 billion in the month.

In November, “positive news on the vaccine front drove major equity indexes around the globe to new highs,” the report said.

Equity ETFs inflows were largely up across broad-based index-tracking ETFs and sector ETFs.

“Thematic equity (infrastructure, disruptive technology and ESG) and fundamental factor (value, quality) ETFs also attracted investor interest,” the report said, “whereas low-volatility factor ETFs suffered from a third consecutive month of outflow.”

Low-volatility outflows were $401 million in the month.

Fixed-income net inflows reached $621 million in November, despite outflows from cash alternative ETFs of $146 million.

“A preference for risk may have precipitated redemptions from ‘cash alternative’ ETFs, a category that has otherwise been favoured virtually all year,” the report said.

It also noted that over the course of a volatile 2020, rapid switching between different fixed-income categories has been observed, “proving that investors are comfortable using ETFs as tactical vehicles.”

Commodities ETFs saw redemptions of $24 million in the month, specifically among gold commodity ETFs. It was the category’s first month of net outflows in 2020, “reversing a year-long inflow streak for this safe-haven asset class,” the report said.

During the month, 19 new ETFs launched — six from new provider Ninepoint Partners.

As as result, the total number of ETFs in Canada topped one thousand, reaching 1,011 in the month, the report said.

Staff

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