September was “a relatively quiet month” for Canadian ETFs, according to National Bank’s monthly ETF report. Just less than $2.2 billion flowed into Canadian ETFs last month, down from $4.9 billion in August but more than double September 2020’s seasonally low inflow of $1 billion.
Equity ETFs experienced net outflows of $304 million, primarily due to net redemptions of nearly $2 billion from the iShares S&P/TSX 60 Index ETF (XIU) — though the report noted XIU’s large outflow was “not out of keeping with its typically observed institutional flows.”
Net Canadian equity ETF outflows were $1.74 billion, while U.S. and international equities pulled in over a billion dollars between them.
Fixed-income ETFs had inflows of $1.9 billion, the highest monthly flow of 2021 so far and the highest inflow for September, the report said.
In the multi-asset category, growth-oriented ETFs and all-equity ETFs were “more popular” than those with higher bond allocations, “perhaps signalling that the risk preference of investors remains tilted towards growth,” the report said.
Mackenzie, Vanguard, BMO and TD Asset Management registered the highest provider inflows in September. The report noted Mackenzie received more than $1 billion in flows to its passive U.S. equity product and a new sustainable bond ETF.
However, the largest three providers of ETF inflows for 2021 so far were RBC iShares, BMO and Vanguard, which accounted for 50% of total inflows, but nearly 70% of the market share.
“[This is] suggesting that the ETF ecosystem is continuing to mature and diversify beyond the largest incumbents as the pie grows,” the report said.
Similar to equity ETFs, emerging markets funds also experienced outflows — extending the region’s withdrawal streak to six consecutive months. Notably, the Horizons Emerging Markets Equity Index ETF had the third-highest single long ETF outflow in September ($93 million, representing 68% of the fund’s assets under management).
Overall, year-to-date ETF inflows reached $39 billion, with total AUM reaching $296.5 billion. Ten ETFs launched in the month.