ETF investors returned to passive equities funds in August: report

Demand for equities ETFs returned in August, while bond funds saw outflows as fixed income investors favoured cash.

Canadian ETFs gathered $1.4 billion last month, a report from National Bank Financial said. Equities funds accounted for $1.1 billion of the monthly inflows, while fixed income investment slowed after a strong July.

Crypto ETFs, which had seen positive flows this year despite the plummeting value of the underlying assets, saw outflows of $217 million.

Low-cost passive funds led the way on the equities side, with the iShares S&P/TSX 60 Index ETF (XIU) pulling in $683 million. Dividend and income products remained popular, as did low-volatility and covered-call ETFs, National Bank said, while investors sold energy and bank products.

After pulling in $1.74 billion in July, fixed income ETF flows slowed to $258 million in August.

“Absent the inflows into ‘cash alternative’ ETFs, the fixed income category would have actually suffered outflows,” the report said.

All bond categories except Canada aggregate bonds saw outflows, with the $222 million leaving from Canadian corporate bond ETFs leading the way.

The CI High Interest Savings ETF (CSAV) was second to XIU in monthly inflows with $265 million, and the Purpose High Interest Savings ETF (PSA) was third with $173 million.

In total, the “cash alternative category” took in $589 million.

After losing $217 million in August, cryptoasset ETFs are almost flat for the year with $58 million created, the report said.

ESG funds gathered only $3 million in August, with equities outflows basically nullifying fixed income gains.

In total, $19.5 billion has flowed into Canada-listed ETFs this year, the report said.

Staff

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