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ETFs Canada’s latest ETF launches and terminations: Smaller providers continue to get pushed out of the market

Kimberly Yip Woon Sun is an ETF analyst at Inovestor Inc.

The Canadian ETF industry ended the second quarter with assets under management (AUM) at $181-billion. Despite the booming industry, smaller providers of exchange-traded funds are being forced out of the market owing to increased competition.

The latest example is Galileo Global Equity Advisors Inc., which announced Monday that it will be exiting the industry with the closing – on or about Sept. 9 – of its only ETF, the U.S. Global Go Gold and Precious Metal Miners ETF (GOGO-TSX). “Although the fund has outperformed its peers since its inception [Sept. 29, 2017], the costs associated with maintaining this product in the Canadian marketplace are simply too prohibitive,” Frank Holmes, director of Galileo Global Equity Advisors, said in a news release.

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As for notable recent additions, Evolve Funds Group Inc. launched two themed ETFs in June. The Evolve Global Materials & Mining Enhanced Yield Index ETF (BASE-TSX) seeks to replicate the performance of the Solactive Materials & Mining Index, while mitigating downside risk. The ETF invests directly or indirectly in companies engaged in the manufacturing, mining and/or integration of metals and materials, while writing covered call options on up to 33 per cent of the portfolio securities. It is also offered in unhedged units under the ticker BASE.B.

Evolve also introduced Canada’s first e-gaming ETF last month. The Evolve E-Gaming Index ETF (HERO-TSX) seeks to replicate the performance of the Solactive Electronic Gaming Index, designed to provide investors with access to companies listed domestically and globally that have business activities in the electronic gaming industry. The momentum behind e-gaming "signifies a cultural shift in entertainment with 2.2 billion gamers globally. ... This year, the industry is forecast for growth upwards of 38 per cent,” Raj Lala, president and CEO of Evolve Funds Group Inc., said in a June news release.

June ETF launches

TICKERNAMEASSET CLASSMGT. FEEEXCHANGE
RCDB-NERBC Canadian Discount Bond ETFFixed Income0.15%NEO
BASE-TEvolve Global Materials & Mining Enhanced Yield Index ETFEquity0.60%TSX
BASE.B-TEvolve Global Materials & Mining Enhanced Yield Index ETFEquity0.60%TSX
HERO-TEvolve E-Gaming Index ETFEquity0.70%TSX
CSAV-TCI First Asset High Interest Savings ETFFixed Income0.14%TSX
HQD.U-TBetaPro Nasdaq-100 -2x Daily Bear ETFAlternative1.15%TSX
FLCP-TFranklin Liberty Core Plus Bond ETFFixed Income0.55%TSX
FLSD-TFranklin Liberty Short Duration Bond ETFFixed Income0.40%TSX

Source: Inovestor

June's ETF terminations

TICKERNAMEASSET CLASSDATEAUMMGT. FEE
FUT-TCI First Asset U.S. Tactical Sector Allocation Index ETFEquity9/13/2019$7.529M0.60%
GOGO-TU.S. Global GO GOLD and Precious Metal Miners ETFEquity9/9/2019$5.840M0.60%

Source: Inovestor

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