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”).