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Based on the Scotia ETF EDGE reports from March 4 to March 28, Canadian ETFs saw an inflow of $5.0 billion, a $1.1 billion decrease from the previous month. The bulk of the inflows in March came from equity with nearly $4.0 billion in net creation in two consecutive months while fixed income and cash ETFs accounted for only $0.68 billion in net inflows and mixed allocation for $0.42 billion.

The US stock market started 2024 with a strong first quarter with the S&P 500 posting a return of 10%, a best first quarter gain in five years. While rising Treasury yields put pressure on equities in 2023, the Federal Reserve remained dovish as they reported good economic data but held off from announcing an initial rate cut. Investor optimism has helped drive up stock valuations. The performance was propelled by mega-cap companies like the Magnificent Seven, where tech and growth stocks experienced huge gains.

Net inflows in the commodities asset class were steady as gold reached new highs, possibly spurred by geopolitical risk in eastern Europe and the Middle East. Gold is traditionally seen as a safe haven asset and a hedge to inflation. The crypto market saw another month of net redemptions with outflows of $74 million despite Bitcoin hitting above $70,000 a token.

Instead, the bulk of investor interest was focused on ETFs tracking the S&P 500, which have attracted much of the inflows for the month of March. The Horizons S&P 500 ETF (HXS-T) experienced the largest inflows at $0.41 billion, followed by the Vanguard S&P 500 Index ETF (VFV-T) at $0.39 billion. Similarly to the previous month, investors are moving away from the banking sector and are instead investing in large-cap U.S. equities like those found in the S&P 500.


In March, the Canadian market welcomed the introduction of 11 new ETFs, expanding investment opportunities across a diverse range of asset classes that include equities, fixed income, and commodities.

Riding on last month’s AI hype train, there were two new equity ETFs added. The Evolve Artificial Intelligence Fund (ARTI-T) invests in companies that could benefit from the widespread integration of artificial intelligence. The fund uses a generative AI platform in the portfolio selection process. The Evovest Global Equity ETF (EVO-T) invests in global equities based on a machine-learning investment model.

RBC added three new fixed income funds that appeal to different bond investor profiles. The RBC Core Bond Pool ETF (RCOR-NE), the RBC Core Plus Bond Pool ETF (RPLS-NE), and the RBC Conservative Bond Pool ETF (RCNS-NE) offer diversified fixed income portfolios composed of several global mutual funds while providing regular income streams.

Franklin Templeton introduced three ETFs that track the performance of its own Low Volatility High Dividend Index for each respective region, namely the Franklin U.S. Low Volatility High Dividend Index ETF (CA) (FLVU-NE), the Franklin Canadian Low Volatility High Dividend Index ETF (FLVC-NE), and the Franklin International Low Volatility High Dividend Index ETF (FLVI-NE).

Lastly, BMO added two commodity funds. The BMO Gold Bullion ETF (ZGLD-T) the BMO Gold Bullion Hedged to CAD ETF (ZGLH-T) offer exposure to the price of gold bullion by investing directly in 400 troy ounce bars. Additionally, BMO launched the BMO US Equity Buffer Hedged to CAD ETF – April (ZAPR-NE), where the objective is to match the return of an index designed to measure the large-cap segment of the US equity market up to a cap while providing a buffer again the first 15% of a decrease in the market price of the reference index.

Amy Mak, is senior financial analyst at Inovestor.

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