With so much uncertainty in the stock market, Canadian investors are flocking to fixed-income investments, especially exchange traded funds that specialize in bonds.
Year-to-date, fixed-income ETFs have attracted more money than their equity peers, and in recent months they’ve been extra tantalizing, according to data from Investor Economics that was published by the Canadian ETF Association.
Since Jan. 1, fixed income ETFs have seen net inflows of $3.8-billion, while equity ETFs have brought in a net $2.8-billion. But in July, fixed-income ETFs had net inflows of $561-million while equity funds saw net redemptions of $679-million.
Because the equity outflows were so strong, the entire industry actually saw net redemptions of $144-million last month. However, equity funds are much bigger, home to about $32-billion of Canadians’ money, while fixed-income ETFs have about $16-billion invested.
On a more granular level, the ETFs with the biggest inflows this year are corporate bond funds, including BMO’s Aggregate Bond Index ETF and iShares DEX All Corporate Bond Index Fund.