Canadian ETFs: Canadian Fixed Income Continue to Dominate Inflow, Ten New Launches Include Dividend and Money Market ETFs
In April, Canadian Fixed Income ETFs experienced a substantial inflow of $2 billion, with approximately $1.1 billion directed towards Money Market ETFs, as reported by National Bank Financial Markets. Given the current financial climate and prevailing uncertainty, it is not surprising that around $0.3 billion flowed out of equity ETFs in the US and Canada, primarily moving towards Fixed Income investments, particularly in money market ETFs and Canadian government bonds. This shift in investment strategy reflects an effort to navigate through these challenging times.
Canadian ETFs in April experienced a significant decline in inflow compared to the previous month, dropping from $7 billion to $2 billion while Canadian equity ETFs saw the largest outflow, totaling $0.8 billion. On the other hand, international equity markets continued to witness demand, resulting in a net inflow of nearly $1 billion, half of the month’s inflow.
According to FactSet, as of April 28th, 53 per cent of companies listed in the S&P 500 had reported their earnings. Out of those, 79 per cent exceeded earnings expectations, and 74 per cent surpassed sales expectations. Despite these positive figures, investors remained cautious due to ongoing analysis of the repercussions of bank failures in the United States. Consequently, they favored international and emerging market stocks, perceiving them as posing lower risk and/or offering better value.
April witnessed the introduction of ten new ETFs:
HRIF, TBNK, and TUEX focus on stable companies that pay dividends, with HRIF additionally employing a covered call strategy to enhance monthly yields. TUEX is a hedged structure of the TD Active U.S. Enhanced Dividend ETF (TUED-T)
UBIL-U, CBIL, and MNU-U ETFs concentrate on short-term investments in money market instruments, such as treasury bills with maturities of less than three months, backed by their respective governments. Providers may have been motivated to launch these ETFs due to the bank runs experienced by some US banks. Investors may have opted to invest in money market funds rather than keeping their funds in bank deposits.
HEB, TECX, and TRVI ETFs specialize in equity investments within specific sectors or thematic areas. TRVI, in addition to its focus on a particular sector, implements a covered call strategy to enhance income yield. TECX is a hedged structure of the TD Global Technology Leaders Index ETF (TEC-T). On the other hand, MCKG aims to capture the potential of global stocks with sustainable business models.
Several Invesco ETFs were delisted in April. According to Invesco, “the objective of this initiative is to simplify the firm’s product offerings to enable it to sharpen the focus on areas of highest client demand.”
| LAUNCHES | ||||||
| TICKER | NAME | ASSET CLASS | SUBCATEGORIES | RISK RATING | INCEPT. DATE | MGT. FEE |
| HEB-T | Hamilton Canadian Bank Equal-Weight Index ETF | Equity | Financials | Medium | 4/3/2023 | 0.19% |
| HRIF-T | Harvest Diversified Equity Income ETF | Equity | Covered Call | Medium | 4/11/2023 | 0.00%** |
| TRVI-T | Harvest Travel & Leisure Income ETF | Equity | Consumer Discretionary | High | 4/11/2023 | 0.75% |
| CBIL-T | Horizons 0-3 Month T-Bill ETF | Fixed Income | Government Bonds, Short-term | Low | 4/12/2023 | 0.10% |
| UBIL-U-T | Horizons 0-3 Month U.S. T-Bill ETF | Fixed Income | Government Bonds, Short-term | Low | 4/12/2023 | 0.12% |
| MCKG-NE | Mackenzie Corporate Knights Global 100 Index ETF | Equity | Global, ESG | Medium | 4/18/2023 | 0.50% |
| TBNK-T | TD Canadian Bank Dividend Index ETF | Equity | Financials, Dividend | Medium | 4/24/2023 | 0.25% |
| TECX-T* | TD Global Technology Leaders CAD Hedged Index ETF | Equity | Global, Technology | Medium to High | 4/24/2023 | 0.35% |
| TUEX-T* | TD Active U.S. Enhanced Dividend CAD Hedged ETF | Equity | Dividend | Medium | 4/24/2023 | 0.65% |
| MNU-U-T | Purpose USD Cash Management Fund | Fixed Income | Corporate Bonds, Short-term | Low | 4/24/2023 | 0.20% |
| TERMINATIONS | ||||||
| TICKER | NAME | ASSET CLASS | SUBCATEGORIES | RISK RATING | TERM. DATE | MGT. FEE |
| PPS | Invesco Canadian Preferred Share Index ETF | Equity | Prefered Shares | Medium | 4/17/2023 | 0.45% |
| PZC | Invesco FTSE RAFI Canadian Small-Mid Index ETF | Equity | Small and Mid Cap | Medium to High | 4/17/2023 | 0.60% |
| PXG,PXG.U | Invesco FTSE RAFI Global+ Index ETF | Equity | Global, Small Cap | Medium | 4/17/2023 | 0.50% |
| PSY, PSY.U | Invesco Global Shareholder Yield ETF | Equity | Global, Dividend | Medium | 4/17/2023 | 0.75% |
| USB, USB.U | Invesco LadderRite U.S. 0-5 Year Corporate Bond Index ETF | Fixed Income | Corporate Bonds | Low to Medium | 4/17/2023 | 0.25% |
| REIT | Invesco S&P/TSX REIT Income Index ETF | Real Estate | Medium | 4/17/2023 | 0.45% | |
| ELV | Invesco S&P Emerging Markets Low Volatility Index ETF | Equity | Low Volatility | Medium | 4/17/2023 | 0.34% |
| ILV, ILV.F | Invesco S&P Internationally Developed Low Volatility Index ETF | Equity | Low Volatility | Low to Medium | 4/17/2023 | 0.40% |
| BKL.C, BKL.F, BKL.U | Invesco Senior Loan Index ETF | Fixed Income | High Yield | Low | 4/17/2023 | 0.72% |
Anthony Ménard, CFA, is vice-president of data management 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
