Shapiso
Canada's growing exchange-traded fund industry gathered new momentum through 2012, as record annual inflows pushed assets up to $56.4-billion.
That's 28 per cent more than ETF companies had in 2011, according to a new report from National Bank Financial.
ETFs have become increasingly popular with investors looking for an inexpensive (thanks to low fees) and simple way to track an index or group of securities. But the industry is still evolving, and new trends such as the rise of actively managed ETFs and international regulatory hurdles have peppered the news.
While Canadian ETFs saw broad gains in general, the inclination investors displayed earlier this year to put money into bond products continued to be especially strong through the fall and winter, propelling fixed income ETFs to $7.1-billion of new assets last year – a 54-per-cent increase over 2011.
Volatility in the stock market was the key driver that pushed investors toward fixed income. And within that asset class, preferred shares and corporate bond products have been the most popular.
But unlike 2011, equity inflows also made noticeable gains, adding $4.2-billion in assets. Together with commodity and multi-asset class products, Canada saw a record $12-billion of inflows this year.
The market leaders remained largely unchanged year over year, with industry giant BlackRock (which bought both the iShares and Claymore businesses in Canada) growing by 13 per cent to $41.5-billion in assets under management. While Bank of Montreal's inflows exceeded that of its competitors, its assets are less than a quarter of BlackRock's.
The biggest growth story of the year was Vanguard, which swelled to $500-million in assets from just $60-million under management in 2011.
ETF trends in the United States also highlighted a taste for fixed income, although sector stock ETFs and international ETFs also proved popular, according to a Morningstar analysis. U.S. assets also hit a record in 2012, with inflows of $191-billion (U.S.) – higher than the previous peak in 2008.