A lot more spice is coming to the exchange-traded fund (ETF) market in Canada.
BlackRock Asset Management Canada Ltd. is poised to launch a batch of new iShares Canada emerging markets ETFs, and that could make life uneasy for some mutual fund rivals.
Canada's largest ETF provider has filed a preliminary prospectus for an iShares China ETF (XCH); iShares MSCI Brazil ETF (XBZ); iShares S&P Latin America 40 ETF (XLA) and iShares S&P CNX Nifty India ETF (XID). They will list on the Toronto Stock Exchange. See prospectus.
Like its iShares CDN MSCI Emerging Markets ETF , these new ETFs will also invest in U.S. iShares ETFs tracking various specialty emerging markets indexes.
For instance, the iShares China ETF will invest in U.S.-listed iShares FTSE/Xinhua 25 ETF which tracks 25 of the largest Chinese stocks trading on the Hong Kong Exchange.
And the iShares S&P CNX Nifty India ETF will invest in the U.S.-listed iShares S&P India Nifty 50 ETF.
The prospectus does not reveal the fees for the ETFs, but they will surely be competitive against offerings from Toronto-based Excel Funds Management Inc., which specializes in emerging markets mutual funds.
The filing also anticipates the possibility of slightly higher fees resulting from the application of the harmonized sales tax (HST) in Ontario (13 per cent), British Columbia (12 per cent) and possibly other provinces. The new tax, rather than the 5 per-cent GST, will apply to both ETFs and mutual funds. Any increased costs resulting from an increase in such tax payable by the iShares funds may be borne by unitholders, the prospectus warns.
BlackRock, formerly known as Barclays Global Investors Canada Ltd., also plans to launch two more fixed-income offerings, including the iShares U.S. IG Corporate Bond Index ETF (XIG) and iShares U.S. High Yield Bond Index ETF (XHY). Both of these ETFs will be hedged to Canadian dollars.