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Canadian ETFs: 20 new funds enter marketplace, many focused on income

Based on the Scotia ETF EDGE reports from November 4 to November 29, spanning a four-week period, Canadian ETFs saw an inflow of $10.1 billion. Equity flows experienced the bulk of the inflow $8.1 billion, a significant increase compared to the previous month. Fixed income inflows fell to $1.2 billion, a stark contrast to last month’s $4.3 billion in inflows. Cash refilled its coffers as $61.8 million was parked in the short term to preserve capital and liquidity. Last month’s Crypto bullishness appeared to drop with outflows of $0.20 billion.

November was a month of history making. President-elect Trump sparked the biggest single day post election pop in the stock market in S&P history. Driven by the sense of uncertainty being removed, the market spent the month chasing the 6,000 mark. On Fed Day, officials voted unanimously to lower the federal funds rate for a second straight meeting to support the economy.

Other major news involves global tech giant, NVIDIA, as it replaces Intel Corp. in the Dow Jones Industrial Average. In addition to reaching its best November in terms of auto sales, Tesla’s stock soared to highs it hasn’t seen for the last three years. Investors continue to bet that Trump’s return to the White House can be a positive for the EV market, particularly for Tesla considering his very close relationship with Elon Musk.

Bitcoin exploded past US$90,000 with the election of a pro-crypto President. Since election day, bitcoin prices climbed 39% by the end of November.

Market performance and fund flows go hand-in-hand. iShares Core S&P/TSX Capped Composite Index ETF (XIC-T) took in the most inflows with $1.0 billion, followed by BMO S&P 500 Index ETF (ZSP-T) not far behind with $0.97 billion. Once again, the Vanguard S&P 500 Index ETF (VFV-T) continues to make the top three ETFs with $0.64 billion in new capital. The BMO Aggregate Bond Index ETF (ZAG-T) experienced the largest exodus with $0.80 billion in net redemptions. With the continued interest rate cuts and market indices reaching new records, investors may be shifting their strategies to ride the equity wave.

Additions

November saw 20 new ETFs were launched, half of which belonged to Global X Investments Canada Inc.

Global X introduced two new ETFs from their Premium Yield suite, Global X Mid-Term Government Bond Premium Yield ETF (PAYM-T) and Global X Long-Term Government Bond Premium Yield ETF (PAYL-T). Investing primarily in debt instruments by the Government of Canada, these ETFs are designed to provide consistent monthly cash flow of interest income and option premiums. The options strategy allows for risk mitigation by dynamically adjusting put and call coverage in response to market conditions.

Global X also centered four ETFs to providing exposure to major Canadian sectors, namely Global X Equal Weight Canadian Oil & Gas Index ETF (NRGY-T), Global X Equal Weight Canadian Groceries & Staples Index (MART-T), Global X Equal Weight Canadian Telecommunications Index ETF (RING-T), and Global X Equal Weight Canadian Insurance Index ETF (SAFE-T).

Global X Gold Producers Index ETF (GLDX-T) is another sector-focused ETF that was listed on the TSX. The Fund offers exposure to the performance of some of the largest and most liquid North American-listed gold producers.

Finally, Global X expanded its offering to include ETFs that provide exposure to the Russel 2000 small cap segment. Investors can invest in the index through the Global X Russell 2000 Index ETF and its USD equivalent (RSSX-NE, RSSX-U-NE). The Global X Russell 2000 Covered Call ETF (RSCC-NE) also offers access to index with an income-focused, covered call approach.

Dynamic Funds announced three new ETF series of existing mutual funds. Dynamic Global Fixed Income Fund (DXBG-T) offers exposure to fixed-income opportunities from across the globe. Dynamic Short Term Credit PLUS Fund (DXCP-T) concentrates on shorter-dated bonds to generate yield while benefitting from lower volatility. Dynamic Credit Opportunities Fund (DXCO-T) targets opportunities across the credit spectrum, seeking to generate equity-like returns with traditionally lower fixed-income volatility.

Fidelity Investments Canada ULC launched the US version of the Fidelity Global Equity+ Fund (FGEP-U-T). The ETF employs a global equity strategy that tracks the MSCI All Country World Index, with exposure to a liquid alternative in a traditional mutual fund.

Picton Mahoney Fortified Investment Grade Alternative Fund (PFIG-T) is an actively managed fixed income fund by Picton Mahoney. The fund seeks to enhance yield and return potential through exposure to high-quality, investment-grade credit.

ForAll Core & More U.S. Equity Index ETF (FORU-NE) seeks to replicate the performance of its own ForAll Core & More U.S. Equity Index. This U.S. equity growth solution concentrates on reduced fossil fuel exposure compared to the broad market and hedged to the Canadian dollar.

LongPoint Asset Management Inc. is new to the Canadian ETF market with the listing of four Geared ETFs that employs leverage in the energy space. SavvyLong Geared Crude Oil ETF (CLUP-T) and SavvyShort Geared Crude Oil ETF (CLDN-T) provide exposure to crude oil and are two times leveraged or inverse leveraged to the daily performance of the Solactive Crude Oil Rolling Futures Index.  SavvyLong Geared Natural Gas ETF (NGUP-T) and SavvyShort Geared Natural Gas ETF (NGDN-T) provided exposure to natural gas and are two times leveraged or inverse leveraged to the daily performance of the Solactive Natural Gas Rolling Futures Index.

 

 

Amy Mak, is ETF Specialist 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

 

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