Experts disagree on health of ETF business

Experts disagree on health of ETF business

Experts disagree on health of ETF business

Overall, the numbers point to a great start but there were pockets of strength; investors weren’t buying evenly across all markets. 

“U.S. equities had a big role to play [in the growth] while Canada was a little bit more subdued from an equity standpoint,” said the head of product. “but what you saw was that U.S. was strong, international equity was very strong and in that international equity bucket you saw a lot of flows specifically into Europe as well.”

“Investors definitely looked for broad international exposure which we would generally classify as Europe, Australasia and Far East.”

As things pertain to iShares itself, Chiefalo was quick to point out that investors have responded very positively to its core fund solutions, both those existing prior to 2015, as well as those introduced in the first three months of the year. 

In terms of fund flows, its number one ETF in the first quarter was the iShares Core S&P 500 Index ETF, which interestingly is hedged to the Canadian dollar. 

Why so interesting? 

“When you think about it, as Canadians, we really do have a problem because we are amongst the most home-biased investors you can find,” said ETF Insights managing director Yves Rebetez. “So everybody is exposed to Canada as a core to their portfolio, then everybody is exposed to real estate in Canada, and then everybody in Canada is exposed to the Canadian dollar, which when exhibiting strength you hedge but right now it’s not a strong currency so arguably you say ‘well I don’t need to hedge.’”

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