The Canadian ETF industry product line-up continues to expand with innovative ETFs. Sustainable fixed income ETFs and inflation-protected ETFs were introduced. An ESG-friendly bitcoin ETF was also added to the market.
Accelerate Financial Technologies Inc. introduced the World’s first carbon-negative bitcoin ETF. Bitcoin ETFs have attracted over $3 billion in assets under management. With all the major central banks still using quantitative easing and pumping money supply, investors continue to pour money in bitcoin due to its limited supply. However, its big carbon footprint has been a major concern for investors.
The Accelerate Carbon-Negative Bitcoin ETF gives exposure to bitcoin while reducing its carbon footprint. Accelerate works with a leading third-party to execute a global tree-planting campaign to sequester carbon emissions and help fight climate change. Up to 10% of ABTC’s 0.69% management fee will be allocated to Accelerate’s annual tree-planting campaign. The initial decarbonization initiative will be focused on planting mangrove trees in Madagascar. For each $1,000 investment in ABTC, approximately one net tonne of carbon dioxide is expected to be sequestered per year.
RBC iShares expands its sustainable ETF platform and fixed income lineup with the addition of four ETFs. The new sustainable ETFs, iShares ESG Advanced 1-5 Year Canadian Corporate Bond Index ETF and iShares ESG Advanced Canadian Corporate Bond Index ETF, provide exposure to the Canadian dollar investment grade corporate bond market, and currently seeks to track indexes that are designed to provide efficient exposure to companies demonstrating more sustainable business practices relative to their industry peers, while also excluding issuers from industries with elevated sustainability-related risks.
The new U.S. fixed income ETFs - the iShares U.S. Aggregate Bond Index ETF and iShares U.S. Aggregate Bond Index ETF (CAD-Hedged) - provide exposure to the U.S. dollar-denominated investment grade corporate bond market.
There were no ETF terminations in August.
Kimberly Yip Woon Sun is an investment analyst at Inovestor Asset Management