Canadian ETFs had net outflows of $434 million in June mainly due to redemptions in equity ETFs, says the latest ETF report by National Bank.

The outflow was driven by large redemptions in two iShares funds: of the $1.4 billion outflows in Canadian equity ETFs, $1.2 billion was from redeemed iShares S&P/TSX 60 Index ETF (XIU) and another $0.2 billion from the iShares Core S&P/TSX Capped Composite (XIC), the report said.

The outflows indicate “diminished sentiment towards Canada,” it said.

The total assets of ETFs rose slightly to $157 billion, the report said, despite the net outflow.

Investor interest in U.S. and international equity ETFs “dialled down” in June because of trade tensions, the report said, but U.S. equity ETFs had a net positive inflow across all categories.

Emerging market equity ETFs had an outflow of $24 million, contrary to the trend of inflows for the first five months of 2018, the report said. Global fixed income ETFs had “sizable inflows” in June and for the year-to-date.

Canadian ETFs attracted $10 billion in flows in the first six months of this year, $5.6 billion less than in 2017 for the same period, the report said.

Six ETFs launched in June, making it a “relatively quiet” month, the report said.

Read the full report here.

June outflows from U.S. ETFs

U.S. ETFs had an outflow of $1.5 billion in June, said an accompanying report from National Bank. The ETFs had a net inflow of $122 billion for the first half of 2018, which was half of the inflows for the same period in 2017.

Equity ETFs had a net $6.2 billion outflow in June, with emerging market ETFs losing $7.7 billion amid trade tensions, the report said. Fixed income ETFs had a net $7.6 billion of inflows with a preference for government bond ETFs. Fixed income ETFs have had inflows all year while equity ETFs have fluctuated according to sentiment, the report said.

Read the full report here.

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