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