At the end of February, the Canadian ETF Industry reached a new record high of $270 billion in assets under management. The number of ETFs listed in Canada continues to grow as we welcome the World’s first Bitcoin ETF. Once more, Canadian regulators prove to be more accepting of disruptive investment products. In the U.S, approximately ten Bitcoin ETFs have either been rejected or are still waiting approval by the SEC. Will the success of the Canadian-listed Bitcoin ETFs pave the way for our U.S. counterparts?
In only two days of trading, the Purpose Bitcoin ETF attracted over $420M in assets under management. It will invest directly in physically settled Bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency without the associated risk of self-custody within a digital wallet. The ETFs charge management fees of 1% each.
Shortly after, Evolve Funds Group introduced the Evolve Bitcoin ETF. In order to compete, Evolve slashed the management fee on its Bitcoin ETF from 1% to 0.75%. Several other providers have plans to join the Bitcoin ETF frenzy, including CI Global Asset Management that only charges 0.40% in management fee. In less than a month of trading, Bitcoin ETFs are shaking the investment community and a fee war is already taking place. The next race is who will launch the World’s first Ethereum ETF. Evolve Funds Group and CI Global Asset Management have already filed preliminary prospectus and are waiting for approval.
In other new launches, SmartBe introduced a suite of Canadian and U.S. Factor-based investing ETFs. The “value” investment style behind the SmartBe U.S. Quantitative Value Index ETF (SBQV-NE) and the SmartBe Canadian Quantitative Value Index ETF (SBCV-NE) emphasizes investing in securities that are considered undervalued, based on quantitative analysis compared to other securities. The “momentum” style of investing underpinning the SmartBe U.S. Quantitative Momentum Index ETF (SBQM-NE) and the SmartBe Canadian Quantitative Momentum Index ETF (SBCM-NE) emphasizes investing in securities with higher recent total return performance than other securities.
As part of its commitment to helping investors reach their long-term goals, TD Asset Management reduced the management fees on six of its broad market index TD Exchange-Traded Funds. After these management fee reductions, the TD ETFs will be among the lowest priced broad market index exchange-traded funds in Canada.