Canada’s market for exchange-traded funds has grown to $63.1 billion (CDN) in assets under management (AUM), up $5 billion over last year and an increase of 11.9 percent over year-end 2012, according to new research.
BMO Global Asset Management (GAM) released this finding in its biannual “BMO Canadian ETF Outlook Report.” Fueling the market’s expansion, the report notes, were $2.7 billion in equity inflows in 2013. Fixed income inflows slowed but still attained $2.3 billion.
“The domestic ETF industry enjoyed another stellar year in 2013 with a variety of new and innovative portfolios contributing to its growth,” says Rajiv Silgardo, Co-CEO, BMO Global Asset Management. “Investors concerned about the impact of monetary policy on financial markets and the sustainability of global growth prospects continued to invest in ETFs, largely because of the flexibility they offer and their cost-effectiveness.”
BMO GAM’s ETF business led the Canadian ETF industry in new assets for the third consecutive year in 2013, bringing the company’s market share to 20 percent of industry AUM. Moreover, BMO S&P/TSX Laddered Preferred Share Index ETF (ZPR) was the top selling individual ETF in Canada, attracting investors who were seeking diversified yield sources and lower interest rate sensitivity relative to fixed income.
“Canadian investors are benefitting from increasing competition in our industry,” says Silgardo. “ETF providers are focusing more on product innovation than ever before and we’re all being compelled to develop stronger product suites and to find ways to differentiate ourselves.”