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Ben Kleinberg

Canadian ETFs: 15 new launches in October

Canadian ETFs added $2.6 billion in October, once again led by cash alternative ETFs. Equity ETFs welcomed $676 million of inflows, majority of which belonged to U.S. broad market equity. Among the sector equity ETFs, Technology, Utilities and Materials sectors had net inflows, while Financials, Energy and Healthcare suffered redemptions.

Cash alternative ETFs continued to dominate the fixed income category, representing 63% of the total inflow. Canadian corporate bond ETFs had the second highest inflow among the category, adding $680 million of new money. Ultra-short term bond ETFs, which have minimal duration risk, also had significant inflows during the month.

There were 15 new products launched during the month of October. Among the latest offerings was a new liquid alternative strategy from Desjardins. The Desjardins Alt Long/Short Global Equity Markets ETF (DAMG-T) targets absolute positive returns regardless of whether the markets are up or down. Alternative strategies typically display low volatility and low correlation with traditional asset classes, making them popular choices during periods of uncertainty in the markets. The ETF will enter both long and short positions in futures contracts and index ETFs in order to achieve its goal. DAMG charges a 1% management fee and is also offered as a US dollar series.

Harvest ETFs released a suite of enhanced income ETFs, applying 1.25x leverage on some of their most popular covered call strategies. Harvest ETFs has already seen over $1 billion in assets flow into these equity income ETFs in 2022, as the demand for higher yields has been steadfast all year. The new ETFs aim to provide even greater yields, by applying a 25% leverage component to existing Harvest equity income ETFs. The leverage component increases the monthly cash flow paid to unitholders, but at the same time elevates the risk profile of the strategy. The initial target yield of the five new products range between 9.6%-12.8%. These ETFs do not charge an explicit management fee, however they are subject to the fees of the underlying ETFs in the portfolio.

RBC Global Asset Management expanded its lineup with the launch of two new Target Maturity Corporate Bond ETFs (maturing in 2028 and 2029). Each ETF tracks a unique index that represents the performance of a held-to-maturity portfolio consisting of primarily Canadian investment grade corporate bonds with effective maturities in 2028 and 2029, respectively. The funds will provide income for a limited period of time, until their termination date when the final net asset value is returned to the unitholders. These solutions allow investors to earn passive income and own a liquid investment, while also knowing the date at which their principal will be returned to them. RBC’s target maturity bond lineup now includes all maturity dates between 2022-2029, and they charge a management fee of 0.25%.

There were no ETF terminations in October.

Ben Kleinberg, CFA
Product Manager at Inovestor

At Inovestor, we believe that investors deserve access to the best financial information available. Leveraging our suite of award-winning research technologies, we go above and beyond to put that information at your fingertips. For more information, please visit inovestor.com.

Canadian ETFs: Largest monthly inflow ever for cash alternatives; 30 new products launched in September

Canadian ETFs added $1.9 billion in new money in September, led by creations in the fixed income category. Equity ETFs saw $436 million in outflows, primarily due to redemptions in broad Canadian equity. Among the equity asset class, dividend/income strategies had $156 million of inflows. Sectors ETFS, such as health care, utilities, energy and financials also had net positive flows during the month.

Cash continues to be king, as cash alternative ETFs saw the highest inflows among the fixed income categories, with $1.6 billion in net inflows during the month of September – the highest monthly inflow ever for this category. CI High Interest Savings ETF (CSAV-T) and Purpose High Interest Savings ETF (PSA-T) remain the most popular ETFs in the category. Ultra-short-term bonds, which also exhibit minimal duration risk, recorded inflows during the month.

Cryptocurrency ETFs faced $81 million in outflows in September, led by 3iQ Coinshares Ether ETF (ETHQ-T).

After a relatively quiet few months, Canadian ETF providers ended the third quarter by introducing 30 new products. The lnewest offerings include the CI Auspice Brod Commodity ETF (CCOM-T). The fund provides exposure to a portfolio of commodity futures contracts across the energy, metals and agricultural sectors. Commodities historically exhibit low correlation to other asset classes and can provide diversification to a typical stock/bond portfolio. In order to minimize volatility and drawdowns, the ETF combines tactical exposure to 12 different commodities that can be long or flat, dynamic risk management and contract roll optimization. The ETF has a Low to Medium risk level, and charges a management fee of 0.52%.

Purpose Investments expanded their cash solutions lineup with the launch of the Purpose Cash Management Fund (MNY-T). The fund is designed to provide investors with a way to capitalize off rising interest rates, while also maintaining daily liquidity. The fund will invest in a diversified portfolio of high-quality Canadian money market instruments and has an anticipated yield of 3.30%. Cash alternative ETFs can be a great way to maximize the return on your cash balance without the lock-up features of guaranteed investment certificates. The ETF series of the fund trades on the TSX and charges a management fee of 0.20%.

Emerge Canada Inc. launched a new suite of actively managed sustainable equity ETFs. The Emerge EMPWR funds are structured as multi-manager funds and aim to showcase the talent of an all-women portfolio management team. Lisa Langley, President and CEO of Emerge, explains that they launched the EMPWR program to “support and advocate for female managers and inspire new women portfolio managers to join the industry”. These new funds invest primarily in global equities with a focus on ESG and sustainability. The EMPWR program uses a proprietary sustainability ranking system to evaluate the portfolios of their sub-advisors, both at the aggregate level, as well as on an individual security basis. The five new ETFs (as well as their identical USD versions) trade on the NEO exchange and charge a management fee of 0.80%.

Building on the success of the Fidelity Advantage Bitcoin ETF, Fidelity Investments Canada completed the launch of the Fidelity Advantage Ether ETF (FETH-T), providing investors with exposure to ether. Fidelity Clearing Canada will serve as the custodian of the fund, offering the ETF access to the trading and custody of ether in a secure way. The ETF charges a management fee of 0.40%, and an MER capped at 0.95%.

The other releases this month included covered call sector strategies, leveraged Canadian bank products, short-term active fixed income and a target date fund. Twelve different providers participated in launching new ETFs this month, and there were no terminations in September.

Canadian ETFs: The latest launches and where investors are putting their money

Canadian ETFs added $1.4 billion in the month of August, led primarily by the equity asset class. Broad market Canadian equity dominated the inflows, as the iShares S&P/TSX 60 Index ETF (XIU-T) led all ETFs with $683 million in new money. In terms of factor-based equity ETFs, income and low volatility strategies saw the highest inflows, with $199 million and $63 million, respectively. Among the sector equity funds, defensive sectors such as utilities and healthcare had the highest inflows, while energy and financials lost assets.

Cash alternative ETFs continue to be the most popular fixed income category this year. Cash alternative funds added $589 in assets during the month, led by the popular CI High Interest Savings ETF (CSAV-T), and the Purpose High Interest Savings ETF (PSA-T). Canadian corporate bonds had the highest outflow during the month, with $222 million in redemptions. Excluding the cash alternative category, the fixed income asset class would have suffered a net loss in August.

Multi asset ETFs added $121 million during the month, bringing the total year to date inflow to $1.8 billion. Alternative strategies, including NBI Liquid Alternatives ETF (NALT-T) and AGFiQ US Market Neutral Anti Beta ETF (QBTL-T) had the highest inflows among all asset allocation portfolios.

Crypto assets shed $217 million in August. Despite a volatile year for cryptocurrencies, the asset class is near flat in terms of flows year to date. Purpose Ether ETF (ETHH-T) had the largest outflow last month, with $151 million in redemptions.

The Canadian ETF market welcomed two new funds. Horizons launched the Horizons Canadian Utility Services High Dividend ETF (UTIL-T), providing exposure to Canadian dividend-paying utility service companies. The fund goes beyond traditional utilities exposure to also include pipelines and telecom companies – all deemed critical services. Utility services have typically been regarded as a defensive sector of the stock market, providing stability even during periods of volatility and bear markets. While there’s been no shortage of yield-focused strategies released in 2022 to help protect portfolios from rising inflation, UTIL may appeal to investors who are also seeking protection from a broader market decline. The ETF charges an annual management fee of 0.50%.

TD Asset Management has joined fellow providers and launched their own carbon credit product. The TD Carbon Credit Index ETF (TCBN-T) seeks to replicate the performance of an index which measures the investment return of global cap-and-trade carbon emission credits. This alternative asset class exhibits a historically low correlation to traditional asset classes and can also help mitigate the negative portfolio impacts of rising carbon costs and exposure. This ETF charges a management fee of 0.65%, currently the lowest among all the carbon credit ETFs in Canada.

Fidelity Investments Canada terminated their suite of Systematic U.S. High Yield bond ETFs. The ETFs were de-listed from the TSX at the close on August 19th 2022.

Ben Kleinberg, CFA

Product Manager at Inovestor

At Inovestor, we believe that investors deserve access to the best financial information available. Leveraging our suite of award-winning research technologies, we go above and beyond to put that information at your fingertips. For more information, please visit inovestor.com.

Canadian ETFs add $1.6 billion despite rare month of equity outflows

Equity ETFs suffered a rare month of outflows in the month of July, while the ETF market as a whole rebounded from last month with over $1.6 billion of net inflows. The outflows from equities were dominated by the broad market Canadian equity category. iShares S&P/TSX 60 Index ETF (XIU-T), the largest ETF in Canada by assets under management, faced the largest single outflow with over $800 million withdrawn. Sector-specific equities also had net outflows during the month, led primarily by the energy sector. Energy ETFs shed $158 million in assets during July, it’s first month of outflows in 2022.

The majority of new assets were committed to fixed income ETFs, with long term government bonds and cash alternatives leading the pack. TD Canadian Long Term Federal Bond ETF (TCLB-T) had the largest single ETF inflow for the month, while three of the top five largest single inflows belonged to cash alternative ETFs. Both sub-investment grade and preferred share ETFs continued to suffer outflows. As pointed out by National Bank Financial Markets, the sub-investment grade and preferred share categories have shed close to $1 billion in assets year to date – a sign that fixed income investors have a lower appetite for risk during these volatile market conditions.

ESG ETFs continued to gather new assets in July, with $259 billion in positive net flows across all asset classes. The fixed income ESG category, which has added several new launches in the past year, represented over 70% of the new money.

Cryptocurrency ETFs rebounded after a painful June, with close to $200 million in net flows during the month of July. Year to date, the asset class has achieved positive net flows, with $256 million in new money added, despite extreme volatility in cryptocurrency markets throughout the first half of 2022. Purpose Bitcoin ETF (BTCC-T) and Purpose Ether ETF (ETHH-T) accounted for the majority of inflows among the crypto-asset category.

It was a quiet month in terms of new ETF launches, with only one new product listed in Canada. Purpose Investments Inc. launched the Black Diamond Impact Core Equity Fund (BDIC-T). The Fund offers diverse exposure across equity securities of companies all around the world that demonstrate a forward-looking sensitivity to Environmental, Social, and Governance factors. The subadvisor for this fund is Black Diamond Asset Management Inc., and the ETF series charges a management fee of 0.95%.

Harvest ETFs terminated two of their thematic equity funds after less than 16 months of trading, Harvest Digital Sports & Entertainment Index ETF (HSPN-T) and Harvest Space Innovation Index ETF (ORBT-T) – proof that certain speculative themes that gathered a lot of investor interest a year ago have begun to fall out of favour.

As previously announced, CIBC Asset Management terminated their suite of Multifactor ETFs during the month of July.

June ETF launches and trends

For the first time in three years, inflows into Canadian ETFs were outweighed by redemptions, resulting in a net monthly outflow of $682 million. Equities bore the brunt of the withdrawals, with over $2.2 billion exiting broad market Canadian and US equity funds, according to National Bank Financial Markets. Sector specific equity ETFs saw net inflows for the month, $442 million of which poured into the financials sector.

Despite the difficulties that bonds have faced this year, fixed income investors sang a different tune this past month, as fixed income ETFs saw outsized inflows. Majority of the new money was directed to Canadian aggregate bond and cash alternative products. Horizons Canadian Select Universe Bond ETF (HBB-T) and CI High Interest Savings ETF (CSAV-T) had the first and third highest inflows of all ETFs during the month, respectively.

Cryptocurrency ETFs saw nearly $700 million in outflows during the month of June, representing 16% of the asset class’s AUM. Purpose Bitcoin ETF (BTCC-T) and 3iQ CoinShares Bitcoin ETF (BTCQ-T) had the largest outflows among the crypto asset lineup, shedding $455 million and $197 million, respectively. National Bank Financial Markets explains that “the outflows from these two ETFs were unusually large and took place on a single day, suggesting institutional activities were present in the outflows”. The price of Bitcoin also fell to its lowest level since December 2020 during the month.

Only two new funds were launched in June, both providing income-based strategies. Harvest Portfolios Group launched the Harvest Canadian Equity Income Leaders ETF (HLIF-T), designed to provide investors with access to large cap, dividend paying Canadian equities. The ETF will also write covered call options on up to 33% of the holdings in order to lower the volatility of returns and deliver steady monthly income. The fund has a target yield of 7% and charges a management fee 0.65%.

Ninepoint Partners listed their newest ETF offering on the NEO exchange. The Ninepoint Target Income Fund (TIF-T) aims to provide stable monthly distributions and moderate market volatility by incorporating derivative strategies. The fund will invest in a diversified portfolio of income generating equity investments, and the active risk management overlay will be supported by RBC Quantitative Investment Solution’s put selling strategy. The ETF offers a 6% target income distribution and charges a management fee of 0.60%.

There has been no shortage of income-based funds launched during this period of rising interest rates and market volatility. Hamilton and BMO are among the other providers who released similar strategies in 2022. Providers are typically quick to respond to investor needs, and it seems that many investors are looking for enhanced income solutions amid uncertainty in the financial markets.

During the month, Franklin Templeton completed their previously announced delisting of two active equity ETFs, as described below.

Release Notes 20220616.1

Overview

This post details the changes that went into production for Inovestor For Advisors on June 16th, 2022:

Enhancement 1

Mutual Fund Style and Risk Statistics

You can now identify the equity and/or fixed income management style for most mutual funds based on the fund’s holdings. For the equity portion of a fund, the style refers to the market capitalization and the factor tilt of the constituents. For fixed income, the style is indicated by the maturity of the constituents, as well as the credit rating.

As well, we have added valuable metrics to help you identify risk adjusted performance of any mutual fund, enabling you to select fund managers that align with your client’s goals.

Bug Fixes

This release contains several bug fixes and text changes throughout the application.

 

Canadian ETFs: May launches and terminations

Flows into the Canadian ETF market continue to slow throughout the second quarter of 2022, compared to the meteoric growth rate seen months ago. Nevertheless, new products continue to be launched as investors search for access to more investment opportunities. Broad market Canadian equity ETFs have seen some of the largest inflows this year. Canadian equity funds have fared much better than their US counterparts in 2022, given their larger exposure to energy, financials and materials sectors.  

New ETF launches in May were dominated by thematic equity. Blackrock released a new suite of megatrend ETFs, giving investors easy access to companies that are driving innovation and shaping the global economic future. Among the new offerings is the iShares Cybersecurity and Tech Index ETF (XHAK-T), which provides exposure to global stocks along the full value chain of the cybersecurity industry. The iShares Global Clean Energy Index ETF (XCLN-T) was another one of the new launches, providing diversified exposure to companies in the renewable energy sector. The ETFs charge a management of 0.39% and 0.35%, respectively. 

CI Global Asset Management continues to launch new funds focused on investment opportunities in digital megatrends. The CI Galaxy Blockchain ETF (CBCX-T) invests in companies that are, either directly or indirectly, involved in the development and adoption of blockchain and digital assets. The ETF charges a management fee of 0.50% and hedges all currency risk. The CI Galaxy Metaverse ETF (CMVX-T) provides exposure to companies that are materially engaged in the interaction, enablement, and connectivity of the metaverse. Fidelity also released their own Metaverse ETF in May.  

During the month, Horizons ETFs launched Canada’s first ETF providing exposure to the performance of companies active in copper-ore mining. The Horizons Copper Producers Index ETF (COPP-T) invests in both pure-play copper mining companies, as well as companies that have copper production as a significant business line. Although it is one of the world’s oldest industrial metals, copper has become increasingly important as an essential material component in electric vehicles. The ETF invests in small, mid and large cap companies listed on North American exchanges, and charges a management fee of 0.65%.  

As previously announced, Evolve ETFs de-listed their suite of CleanBeta ETFs, including the Evolve S&P/TSX 60 CleanBeta Fund (SIX-T) and the Evolve S&P500 CleanBeta Fund (FIVE-T), after just 12 months of trading.  

Canadian ETFs welcomed $1.5 billion in net flows in April amid market sell off; three funds launched

Canadian ETFs added $1.5 billion in April, led by inflows to Canadian equity, thematic equity and Canadian aggregate bonds, bringing the total year-to-date inflow to $15 billion. Inflows slowed down in April, but remained positive despite the wide selloff in equity markets.

Canadian equity ETFs once again saw the largest inflow among the equity asset class, representing 86% of the total equity flows for month. $666 million of this demand belonged to ESG focused ETFs. National Bank’s NBI Sustainable Canadian Equity ETF (“NSCE-T”) amassed $522 million in April, the largest single ETF inflow for the month, led by apparent institutional subscriptions.

Fixed income ETFs gathered $645 million in new money, most of which went to Canadian aggregate bond products, despite major aggregate bond indices having suffered significant losses year-to-date. iShares Core Canadian Universe Bond Index (“XBB-T”) led the group with $220 million in net flows.

Cryptocurrency ETFs suffered their biggest outflow since their initial launch in February of last year. The Purpose Bitcoin ETF (“BTCC-T”) recorded $318 million of outflows throughout April, as the price of Bitcoin dropped to its lowest level in two years. 3iQ, a notable issuer of crypto focused products, saw $87 million in outflows, representing over 5% of their total AUM.

The velocity of new ETF launches relaxed this month, with only 3 new issues, all from CI Global Asset Management. The CI Floating Rate Income Fund (“CFRT-T”) invests in floating rate securities, which help mitigate the impact of rising interest rates. Floating rate securities have fared much better than other fixed income categories year-to-date, due to inflationary pressures and hawkish central banks taking a toll on bond prices. The fund is actively managed and has the lowest management fee of any floating rate ETF in Canada at 0.35%. CI also launched the ETF series of the CI Global High Yield Credit Private Pool (“CGHY-T”). This fund invests in non-investment grade corporate bonds and aims to generate income and potential capital appreciation. The ETF charges a management fee of 0.55% and is also offered in US dollar units.

During the month, CI Global Asset Management completed their previously announced merger of several ETFs as part of its continuing strategy to modernize its product lineup. Notably, three of their factor-based Canadian equity products were terminated and converted to units of the CI WisdomTree Canada Quality Dividend Growth Index ETF (“DGRC-T”). Recall that CI Financial purchased WisdomTree Investment Inc.’s Canadian business back in 2020, including their 14 TSX-listed ETF products. The move should also benefit unitholders as the continuing funds have larger asset bases, thereby increasing trading efficiencies.

Release Notes 20220426.1

Overview

This post details the changes that went into production for Inovestor For Advisors on April 26th 2022:

Feature 1

Earnings Calendar

You can now view upcoming and past earnings results for US listed companies. Estimates are powered by Estimize, an industry leader in crowdsourcing companies earnings estimates. Switch between EPS and Revenue results, and filter by Sector to narrow your search. Actual results are updated the following day. We plan on adding more features to this new Calendar page in the months to come – Stay tuned!

 

Enhancement 1

StockGuide UX (for paid StockGuide subscribers)

Changes were made to improve your work flow. Datasets have been reorganized so you can quickly identify the template and data source you’re looking for. Other improvements allow you to select companies much quicker, so you can dive straight into the data and spend less time setting parameters. You can finally share the results of your custom spreadsheets/screeners with the click of a button! The Share feature allows you to generate a unique link to your work, so you can easily send to others without the need to export.

Bug Fixes

This release contains several bug fixes and text changes throughout the application.

 

Canadian ETFs: March launches and trends

Equities were the dominant asset class once again during the month of March, representing $2.5 billion in net flows. Cap-weighted, sector and thematic ETFs saw the strongest demand among equities. The energy sector led the pack with a record inflow of $541 million, marking its greatest single month of net flows. Within the sector, the iShares S&P/TSX Capped Energy Index ETF (“XEG-T”) had its highest monthly inflow since the product’s inception in 2001.

Fixed income ETFs saw higher demand during the month, gathering $1.6 billion in new money. Canadian aggregate bond and U.S. bond ETFs dominated the inflow to the fixed income category. Horizons CDN Select Universe Bond ETF (“HBB-T”) led all ETFs with $649 million of inflows during March. Throughout the first quarter of 2022, riskier categories, such a Canadian corporate bonds, foreign bonds and preferred shares were the only ones to lose assets.

Interest in cryptocurrency ETFs climbed in March, as the prices of Bitcoin and Ether began to rally from their recent dips. The asset class welcomed an additional $400 million in assets, while the Purpose Bitcoin ETF (“BTCC-T”) and the 3iQ CoinShares Bitcoin ETF (“BTCQ-T”) saw the highest inflows among the crypto funds.

Early in the month, CI Global Asset Management released two new thematic equity ETFs. The CI Digital Security ETF (“CBUG-T”) invests in global companies that stand to potentially benefit from the increased adoption of cyber security technology. The CI Bio-Revolution ETF (“CDNA-T”) provides targeted exposure to companies at the forefront of advancements in genetics and biotechnology. Both ETFs charge a 0.40% management fee.

Ninepoint partners successfully launched the income-focused completement to their existing energy fund. The Ninepoint Energy Income Fund (NRGI-NE) seeks to provide investors with income and capital appreciation by investing in dividend-paying, Canadian energy companies. With oil trading at all-time highs, Ninepoint Partners believed the timing seemed right to launch a dividend-paying energy fund. Investors showed that they agree, as the ETF series of this fund saw $26 million in value traded on its first day of trading.

BMO Global Asset Management teamed up with Brookfield Public Securities Group to launch two new funds offering innovative solutions for investors seeking exposure to tech-focused real estate, renewables, and sustainable infrastructure. The funds aim to capture significant trends in the market, while leveraging Brookfield’s expertise in real assets and alternative investments.

During the month of March, Harvest terminated the Class A and Class U units of the Harvest U.S. Equity Plus Income ETF (“HUL-T”).