At the end of November, assets under management (AUM) stood at a record level of $145.9-billion, driven by net inflows of $3.3-billion, according to Yves Rebetez, managing director and editor of ETF Insight. The product shelf keeps on expanding and offers more investment choices. As the industry grows, the influx of market players accelerates. Two new providers joined the ETF market, with the number of market players now at 28.
Equium Capital Management Inc. entered the industry by launching ETF series of the Equium Global Tactical Allocation Fund (“ETAC”). The fund invests primarily in a mix of global equity securities, fixed income investments, derivative securities, and money market instruments. The ETF series units charge a management fee of 0.95%. The asset manager is a boutique investment management firm focused on global, multi-asset portfolio solutions.
Arrow Capital Management Inc. also joined the market through ETF series of the Exemplar Investment Grade Fund. Arrow Capital Management is an independent, employee-owned investment firm founded in 1999. It currently manages over CAD $1 billion of assets.
The industry is slowly becoming saturated, resulting in mergers and acquisitions among market players. This month, some of Questrade Wealth Management Inc.’s ETFs were merged into WisdomTree Asset Management Canada, Inc.’s ETFs as the acquisition, announced in July, come into effect.
Several other acquisitions are in the pipeline: Evolve Funds will acquire Sphere Investment Management Inc.’s ETFs and Sun Life Global Investments is set to take over Excel Funds’ ETFs.
NOVEMBER ETF LAUNCHES:
The Canadian industry has come a long way since the days investors would only hold core ETFs in their portfolios. These “core” are broad stock and bond index funds ideal for long-term investments. Today, investors’ demand for niche ETFs causes the product line-up of theme-driven and sector-specific ETFs to expand.
The Mackenzie Global Leadership Impact ETF (“MWMN”) is the latest themed ETF launched. “The ETF seeks to provide capital growth by investing primarily in companies that promote gender equality and women’s leadership, anywhere in the world.” It is the second gender ETF offered in Canada. The Evolve North American Gender Diversity ETF (“HERS”) invests in North American equity securities that have demonstrated commitment to gender diversity as part of their corporate social responsibility strategy.
Niche ETFs allow investors to capitalize on macro trends. In November, Horizons unveiled one such investment solution, the Horizons Robotics and Automation Index ETF (“ROBO”). ROBO tracks the ROBO Global Robotics and Automation Index, an index designed to provide exposure to the performance of equity securities of robotics-related and/or automation-related companies. Other than conventional sectors like financial, energy and metal, the Canadian ETF space also covers the cyber security industry and even the marijuana industry.