Canadian ETF assets lower in October

Some equity categories lost ground as fixed income funds continued to grow

Canadian ETF assets lower in October

In spite of new offerings being introduced, the Canadian ETF space experienced a decline in assets.

According to the Canadian ETF Association (CETFA), net creations grew somewhat strong month-on-month as the industry netted a total of $1.4 billion in October, compared to just $600 million in September. That contributed to a contraction that brought industry asset levels down to $157.4 billion last month, compared to $163 for the previous month.

The number of funds in the Canadian space rose to 650 as of October 31, representing a one-month change of 12 and a three-month change of 35. There are now 33 sponsors competing in the country’s ETF space, CETFA said.

A look at the one-year growth figures gives a hint on which providers have seen the biggest redemptions or losses. Auspice Capital, which manages just one ETF recognized by CETFA, saw a 54.6% plunge in assets over the last year, bringing its asset levels down to just $12 million as of October 31. TD Asset Management, with just six ETFs, saw its AUM decline by -32.3% to settle at $80 million, while First Trust Portfolios experienced a decline of 18% across 20 ETFs, bringing assets down to a modest $437 million.

BlackRock Canada, which consistently makes top three ETF providers in Canada, also saw a 3.2% loss in AUM in October — a significant deterioration considering its massive asset base of over $157 billion. Still, it maintains a healthy lead over its closest rivals: BMO Asset Management, which had just over $56 billion in assets as of October 31, and Vanguard Canada with a little over $49 billion.

Looking at the market share of funds by category, fixed income saw some positive action with growth from 27.3% in September to 28.1% last month.  Investment-grade bond strategies gained market share from 23.5% to 24.1%, while the high-yield strategies’ share inched up from 3.8% to 3.9%.

Equity ETFs, meanwhile, saw their overall market share slip from 70.2% to 69.4%. That was driven by declines in Canadian (26.2% to 25.6%), international (9.4% to 9.3%), energy (0.8% to 0.7%), healthcare (1.3% to 1.2%), and technology strategies (1.3% to 1.2%).

Looking at net creations in specific funds, the Purpose High Interest Savings ETF (PSA) has made an impressive showing. With $208 million in net creations during October, it was second only to the BMO S&P 500 Index ETF (ZSP), which gathered $258 million in the month. In September, PSA topped the list with net creations of $153 million.