The Canadian ETF industry welcomes another issuer, 1832 Asset Management L.P., an indirectly wholly-owned subsidiary of The Bank of Nova Scotia. Its first suite consists of four ETF portfolios holding other ETFs in the U.S. equity, Canadian equity, International equity and fixed income spaces. The management fee on Scotiabank’s ETFs range from 0.45% to 0.60%.
Invesco launched Canada’s first equal-weight U.S. large-cap ETF. The Invesco S&P 500 Equal Weight Index ETF (“EQL”) provides equal-weight exposure to the companies that make up the S&P 500 Index by allocating 0.2% weight to each company at its quarterly rebalancing. This equal-weight component reduces concentration risk of the S&P 500. To illustrate, the S&P 500 Index (float-adjusted market cap weighted) has an exposure of 26% to the Information Technology sector compared with 13.6% for the S&P 500 Equal Weight Index. The ETF is also offered in hedged and US dollar units and has a management fee of 0.25% of NAV.
MAY ETF LAUNCHES:
In a rising interest rate environment, actively-managed bond funds are an attractive bet to get exposure to fixed income securities. Active bond managers can mitigate risk associated with rising rates by shifting to short duration bonds. In May, six active fixed income ETFs were launched from two different issuers, BMO ETFs and Franklin Templeton Investments. The newly-launched bond ETFs cover the Canadian, U.S. and global market.