Canadian ETF flows hit new record

Flows into Canadian ETFs hit a record in the first half of the year, even as investors’ enthusiasm for crypto funds showed signs of tapering off.

In June, Canadian ETFs attracted $4.5 billion in new assets, bringing the year-to-date flow to $29.7 billion and shattering the previous record set in the first half of 2020 by 35%, according to a report from National Bank of Canada.

Crypto funds — which attracted more than $1 billion in each of the previous two months — experienced an inflow of “merely” $315 million in June, the report said.

National Bank noted that “patterns diverged between similar product suites” from different crypto fund providers. The 3iQ CoinShares Bitcoin ETF saw an inflow of $83 million, while the Ninepoint Bitcoin ETF “bled assets,” losing $19 million.

Equities ETFs accounted for $2.3 billion of the June inflow, with sector ETFs raking in close to $1 billion — outpacing broad-market, index-tracking ETFs, which gathered $585 million.

Financial sector ETFs alone experienced an inflow of almost $500 million, propelled by a “sentiment switch” from growth- to value-oriented stocks, the report noted.

Fixed income ETFs attracted $1.3 billion, driven largely by flows into ultra-short-term and short-term bonds as investors anticipated rising interest rates amid an economic recovery.

After months of redemptions, flows into high-interest savings account ETFs reached $98 million in June, driven primarily by a $137-million flow into the Horizons Cash Maximizer ETF.

Commodities funds attracted $106 million in June, while flows into multi-asset funds reached $421 million.

Last month saw 11 new product launches, including a number of novel products that invest in hydrogen, lithium, green bonds, renewable energy and semiconductors. At the end of the month, there were 1,118 Canadian ETFs listed.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.