The Aequitas NEO Exchange Inc. is scooping up more market listings from industry rival Toronto Stock Exchange, including funds from Som Seif's Purpose Investments Inc.
Exchange-traded fund providers Purpose Investments and Redwood Asset Management, a subsidiary of Purpose, have announced their intention to change the listing venue for a number of funds to the NEO Exchange from the TSX.
The NEO Exchange launched in March, 2016, and has been making headway in the overall ETF market ever since. Invesco Canada Ltd. was the exchange's first company to list with the launch of the PowerShares DWA Global Momentum Index ETF. Now, with the additional funds from Redwood and Purpose Investments, the exchange will be home to 32 funds, comprised of 51 different symbols across seven ETF providers including some of the country's largest ETF providers – BMO Asset Management, RBC Global Asset Management and BlackRock Canada.
The migration of Purpose and Redwood is expected to close later this year; Purpose will see four of its closed-end funds (CEFs) move from the TSX to NEO, while Redwood will migrate two unit-traded funds (UTFs). Redwood's intent to migrate its UTFs will expand its current presence on NEO, following the launch of a series of active ETFs earlier this year. The move means NEO will be the sole exchange to list Redwood's entire fund family. In addition, the migration marks the first time NEO will list CEFs and UTFs.
Purpose and Redwood declined to comment on the venue change.
When the change in listing venue occurs, Purpose and Redwood will be able to reduce their management expense ratios, a decline in fees that Jos Schmitt, president and CEO of the NEO Exchange, said is a direct benefit from the competition NEO brings to the Canadian capital markets. (The final MER fees have not been released)
"We are very proud to see Purpose and Redwood make the commitment to both move certain funds from the TSX to our exchange, and also be the first movers in listing other types of exchange-traded products with us," Mr. Schmitt said. "As we broaden the scope of our NEO-listed product offering, we are energized by having partners as dedicated as we are to doing what is right for investors."
Earlier this month, Invesco Canada Ltd. announced its intention to change the listing venue for the PowerShares Ultra Liquid Long Term Government Bond Index ETF (PGL) from the Toronto Stock Exchange to NEO, while BlackRock Canada moved five iShares ETFs to NEO in January.
The following funds will migrate later this year:
Purpose U.S. Banks Income & Growth Fund (Ticker: PUB.UN)
Purpose Investment Grade Managed Duration Income Fund (Ticker: PFU.UN)
Purpose Limited Duration Investment Grade Preferred Securities Fund – FX Hedged and USD (Tickers: PFD.UN, PFD.U)
Purpose Energy Credit Opportunities Income Fund – Currency Hedged and USD (Tickers: PCF.UN, PCF.U)
Redwood Canadian Investment Grade Preferred Share Fund (P2L) (Ticker: RIGP)
Redwood June 2021 Investment Grade Bond Pool (Ticker: RBP.UN)
Clare O’Hara