Industry blows past 2019 inflow record with nearly $3 billion haul in November
Last month, Canada’s ETF space officially welcomed its one thousandth member – and then welcomed eleven more.
In its latest ETF research report, National Bank tallied a total of 16 ETFs launched in November, including six introduced by newcomer NinePoint Partners on the NEO Exchange. Manulife launched six active ETFs, and Scotiabank unveiled four index ETFs.
“With November’s respectable haul, year-to-date ETF inflows now amount to $37 billion, easily surpassing last year’s record-breaking $28 billion annual inflow,” the report said.
Canadian ETFs took in $2.9 billion in inflows last month, roughly two thirds of which ($1.9 billion) went into equity ETFs. Canadian equity ETFs saw modest redemptions overall, shedding $55 million, while U.S. and International equity strategies took in $800 million and $1.02 billion, respectively.
“[P]ositive news on the vaccine front drove major equity indices around the globe to new highs,” the report said. Cap-weighted ETFs saw $1.189 billion in inflows, followed distantly by sector funds with $423 million in cumulative inflows. Risk-on sentiment thrust assets into hard-hit sectors including energy, which saw $203 million in inflows. Tech-sector ETFs soaked up $110 million for the month, followed by health care and financials with $70 million and $68 million, respectively.
The risk sentiment may also have motivated investors to decrease allocations from cash alternative ETFs, causing $146 million in redemptions from the category that’s been largely favoured this year. “Investors may be deploying cash to areas of the market that promise potentially higher returns now that cash deposits earn less than 1% indicative yield,” the report said.
Fixed-income ETFs took in $621 million last month. Canadian aggregate bond ETFs topped the inflow table easily with $487 million, followed distantly by U.S. / North America ETFs with $98 million. From a maturity perspective, broad/mixed term ETFs proved most popular as they took in roughly $1 billion.
Inverse and leveraged ETFs also saw some action, garnering 17% of net inflows led by bullish natural gas, bearish S&P 500, and bullish gold miner ETFs, as well as new offering from Hamilton ETFs that provides 1.25 times leveraged exposure to Canadian banks.
