Currently the eighth largest ETF provider in the world, WisdomTree Investments has now set its sights on becoming a market leader in the Great White North. The firm launched its Canadian arm of the business in April and quickly installed former Fiera Capital VP Raj Lala as its head of operations. Formally the president and CEO at Propel Capital Corporation, the new head of WisdomTree Canada has a wealth of experience in the fund industry, but will now be concentrating his efforts strictly on exchange-traded funds heading forward.
“We want to be a top five ETF both globally and in Canada,” he says. “The ETF industry in Canada right now is at about $100 billion, so when you benchmark it to the US, where the ETF industry is over $2 trillion – that inherently shows growth opportunity.”
The history of exchange-traded funds has deep roots in Canada; in fact, the world’s first ETF was traded on the TSX back in 1990. Since then the US has become the global leader, and by some distance, but the potential of the Canadian market holds real allure for fund providers. WisdomTree is just the latest entrant to what is fast becoming a crowded market, but the firm has a clear strategy for the growing its business here. “Smart beta is a real focus for Wisdom Tree and it is still quite small in Canada – around $10 billion,” says Lala. “In the US it’s about $400 billion, so that’s a 40:1 ratio. Also with CRM2, advisors will be living in a new regulatory landscape. As they we go through that transition, investors are going to be much more fee conscious – that lends itself to ETFs as a whole.”
Wisdom Tree launched its first suite of ETFs in this country last week. Trading on the TSX, the six funds are the first step for the company as it attempts to extend its reach in the ETF space in Canada. Leading that charge is Raj Lala.
“The focus of our first suite is very much US and international,” he says. “We feel that the Canadian market is looking more and more to invest beyond its own borders. Canada has one of the highest home biases from an investment perspective of any country, but investors are starting to realize that if they want true diversification and better risk-adjusted returns, they need to look beyond our borders.”
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