The Bank of Montreal’s Kevin Gopaul has been elected the next chair of the Canadian ETF Association (CETFA), replacing Atul Tiwari, who held the position for two years.
Mr. Gopaul, head of BMO Global Asset Management Canada, global head of ETFs and chief investment officer, joins the association as chair during a time of rapid growth in exchange-traded funds in Canada.
As regulatory changes continue to put pressure on investment fees, the ETF industry has seen a number of new players and new products, largely in the actively managed space.
Currently, there are 24 ETF providers in Canada managing $130-billion in assets, according to a recent report by National Bank Financial. That is up from only 10 providers managing $97-billion in assets in April, 2016.
CETFA now represents approximately 95 to 97 per cent of industry assets under management compared to just 60 per cent in June 2015.
“This growth really shows we are effectively speaking for the industry as a whole and that has resonated a lot with our discussion with regulators and others,” says Mr. Tiwari, who is also the head of Vanguard Canada. “We are now a group that others seek out for comment on behalf of the industry.”
The Association was formed in late 2011 by three of Canada’s ETF providers including Horizons ETFs, BMO ETFs and Claymore Investments (which was acquired by BlackRock Asset Management in 2012).
The association was created to provide education and resources on ETF investing in Canada.
Since then, the association has grown to include 46 members consisting of ETF providers, affiliates and portfolio managers – as well as one of Canada’s roboadvisers Wealthbar, which joined in February.
Looking back on his term, Mr. Tiwari says major changes in the ETF industry include the rapid growth of providers and assets, the increase in investment flows moving into ETFs and regulatory changes such as transparency of fees and CRM2.
“In the two years at CETFA, we have stepped up our game on regulatory advocacy,” Mr. Tiwari said in an interview. “In areas where we are able to be more engaged, we are doing so earlier in the process with regulators.
One major issue that remains on the table for the ETF industry is the limited access to the product for investors. Currently, investors can only access ETFs through a discount brokerage or a securities licensed adviser (including a robo-adviser platform).
The initiative to give investors more avenues to buy ETFs saw CETFA work closely with a number of industry groups including the Mutual Fund Dealer Association and the Federation of Mutual Fund Dealers. In 2015, the joint effort resulted in an announcement that mutual fund dealers would be able to provide mutual fund advisers access to an exchange to purchase ETFS for their clients through a partnership with custody and trade execution provider National Bank Correspondent Network (NBCN).
But for many mutual fund investment firms the solution has been a challenging one to implement and therefore has not yet been widely adopted.Report Typo/Error