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The Canadian ETF industry reached $257 billion in assets under management at the end of November, compared to $205 billion one year ago, for an annual growth rate of 25.4%. ETFs reported record inflows of $40 billion this year representing 19.5% of the AUM at the beginning of the year. In the last 5-year period, the ETF industry passed from $89.6 billion to $257 billion for an annual growth rate of 23.5%.

Thematic ETFs were popular this year. ESG ETFs saw inflows of $1.8 billion compared to the last record set in 2018 of approximately $750 million. The number of ESG ETFs created during the year was 49, bringing the number at year-end to 58. Innovation was another major theme. Emerge, a thematic ETF provider, was able to take full advantage of this trend by increasing its assets under management from $10M to $204M as a result of the $157M inflow.

In the last few years, asset allocation ETFs have made a breakthrough for investors who want simplicity. Since their introduction in 2018, they collectively provided an inflow of approximately $100 million each month. Thirteen out of 39 ETF providers offer asset allocation ETFs.


December was rather quiet in terms of launches which is not unusual. Only Horizons launched a new ETF. The Horizons Tactical Absolute Return Bond ETF takes long and short positions in debt instruments and derivatives, primarily North American, across the entire credit spectrum in order to provide positive absolute returns with low volatility in any environment. Interest in bitcoin has returned strongly as a result of the impressive rise in price. For bitcoin enthusiasts, there is no bitcoin ETF yet, but there are other structures. Honourable mention to the CI Galaxy Bitcoin Fund (BTCG.UN & BTCG.U) managed by CI Investments, a closed-end investment fund established as a trust under the laws of the Province of Ontario that started operations on December 16.

December Launches

HARB-THorizons Tactical Absolute Return Bond ETFAlternativeAbsolute ReturnLow to Medium12/7/20200.75%*
HARB.J-THorizons Tactical Absolute Return Bond ETFAlternativeAbsolute ReturnLow to Medium12/7/20200.75%*

*plus 20% over high water mark and a huddle rate between 3% and 5%, depending on the bank of Canada overnight rate.

December Terminations

ZJNBMO Junior Gas Index ETFEquitySmall Cap; Energy2020-12-150.55%
ZJOBMO Junior Oil Index ETFEquitySmall Cap; Energy2020-12-150.55%
ZVIBMO MSCI EAFE Value Index ETFEquityValue; International2020-12-150.40%
HGMHorizons Managed Global Opportunities ETFMulti-AssetGlobal2020-12-090.50%

This report provided to the Globe and Mail by Inovestor

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