Flows into Canadian ETFs top $4B for third straight month

Flows into Canadian ETFs started the year — and decade — off strong, with inflows exceeding $4 billion for the the third consecutive month, according to a report from National Bank of Canada. 

January attracted $4.1 billion in inflows spread across all asset classes, and saw 25 ETF launches from seven providers. It was also the biggest month for new environmental, social and governance (ESG) ETFs since March 2019. 

Fixed income ETFs led the board once again, taking in another $2 billion in January. Large monthly inflows were seen by Canada aggregate bond ETFs and cash-alternative “savings account” ETFs. Canadian government bond ETFs saw a slight outflow. 

Equity ETFs saw an even spread between U.S. and international equities. Low-cost, broad-market equity ETFs and a newly launched option strategy ETF had the most inflows in the U.S. Internationally, both emerging markets and international developed markets carried the momentum of inflows from 2019 into the new year. 

Canadian equity ETFs saw outflows of $185 million, attributed to a “typical and large” outflow from the iShares S&P/TSX 60 Index ETF. Canadian financial and energy sector ETFs saw outflows of $138 and $46 million, respectively.

Multi-asset ETFs attracted $448 million inflows, with asset allocation ETFs and market neutral ETFs proving the most popular with investors. 

New provider Russell Investments entered the market in January, contributing four of the 25 new launches. Other providers who introduced new ETFs included CIBC, BMO, CI First Asset, Fidelity, Harvest and Vanguard.

Most of the ETF launches were multi-asset or ESG-focused, with BMO introducing a suite of seven new ESG ETFs.

Maddie Johnson

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