Flows into Canadian ETFs slowed in September

Flows into Canadian ETFs cooled off in September, reaching $437 million after hitting $2.7 billion in August, according a report from National Bank of Canada.

September’s figures brought year-to-date flows to almost $16 billion — on pace with last year’s numbers — and total assets to $188 billion.

Fixed income ETFs led the board, taking in $1.3 billion in new assets in September. All subcategories of fixed income saw strong inflows except sub-investment grade. The most popular categories were Canada aggregate bonds and high-interest savings account ETFs, a category that also saw new launches and filings. 

On the other hand, equity ETFs bled $1.1 billion in outflows, which included a $940 million outflow from the iShares S&P/TSX 60 Index ETF.

Multi-asset ETFs took in $268 million into currency, asset allocation and alternative ETFs, while commodity ETF flows were flat in September.

Fourteen ETFs were launched during the month. Two providers — First Block and Galileo — exited the market by delisting the only ETFs they offered, bringing the number of ETF providers in Canada down to 35.

U.S. ETF inflows bounce back in September

Net inflows to U.S. ETFs reached $48.7 billion in September, bringing year-to-date flows to nearly $200 billion, according to National Bank’s U.S. report. 

The inflows came on the heels of an atrocious August, when investors sold $20 billion in equity ETFs. According to the report, flows are now back on track to match 2018’s numbers.  

U.S.-focused equity ETFs saw the highest inflows, reaching $30.4 billion in September. So far this year, $80 billion has flowed into U.S.-focused ETFs, while $3 billion has been withdrawn from foreign equity ETFs. 

Real estate has shown the best performance among sectors so far this year, with an inflow in September of $1.3 billion. On the other end of the spectrum, the healthcare sector has seen outflows total $5.1 billion year-to-date. National Bank attributed the sector’s poor performance to drug prices being a potential election issue in 2020.

In regards to fixed income ETFs, September’s inflows surpassed the monthly average of $12.5 billion, reaching $15 billion. Sub-investment grade ETFs had their highest inflow in four years, hitting $4.7 billion.

Maddie Johnson

Maddie is a freelance writer and editor who has been reporting for Advisor.ca since 2019.