Equity ETFs rebound in second largest monthly inflow year-to-date

National Bank says November was also a strong month for fixed income and cryptos

Equity ETFs rebound in second largest monthly inflow year-to-date
Steve Randall

Canada’s exchange-traded funds continued to shine in November, posting their second-best inflow of 2023 so far and soaring ahead of the previous month’s total.

National Bank of Canada’s ETF flows report shows $4.9 billion flowed into Canadian ETFs last month, with a rebound in the equity asset class continuing more than half at $2.7 billion led by market cap-weighted funds ($1.6 billion) while broad developed markets and emerging markets witnessed outflows. Sector ETFs took $551 million and dividend/income saw inflow of $296 million.

Canadian and U.S. equities were the primary focus with almost $1.9 billion and $955 million respectively. This took Canadian equity ETF inflows to $5 billion year-to-date while U.S. equity ETFs remain down year-to-date at -$821 million.

Technology and utilities were the key focus sectors but there was new money for all sectors apart from health care.

Fixed income ETFs also posted a solid month of inflows at $974 million, although this was a far slower pace than October’s $1.9 billion amid weaker sentiment on credit. Money market funds were the largest category with $676 million, despite a slowdown for this asset class from the previous month, followed by long term bond ETFs ($666 million) and target maturity ETFs ($250 million).

Canadian ETFs have seen net inflows of $34 billion in 2023 with more than half to fixed income ETFs, at $19.8 billion while equity achieved $11 billion.

30-month-high for cryptos

Crypto ETFs posted their best performance since May 2021 with $815 million inflows, representing 27% of the asset class’s assets at the start of the month.

Crypto-asset prices may be well-below the 2021 high of $70,000 for Bitcoin, but there has been an upward trend in recent months as expectation rises that the SEC will give approval for spot Bitcoin ETFs in the United States.

There were seven ETF launches in November including four from Mackenzie, one from new provider Tralucent, and two from Guardian.

RBC iShares, BMO, and Vanguard were the three largest ETF providers by market share.