National Bank of Canada is the fifth Canadian bank to enter the exchange-traded funds industry with four new funds expected to launch later this year for Canadian investors.
National Bank Investment, a subsidiary of National Bank of Canada, filed with regulators on Tuesday to launch four actively managed ETFs, including funds that will provide exposure to active preferred shares, family businesses, real assets and one of the first ETFs launching in the new liquid alternatives market.
The bank’s entrance into the market comes on the heels of two other new entrants this fall – iA Clarington and First Block – bringing the total number of Canadian ETF providers to 34, who manage more than $157-billion in assets under management.
National Bank’s funds include: NBI Active Canadian Preferred Shares ETF (NPRF); NBI Canadian Family ETF (NFAM); NBI Global Real Assets Income ETF (NREA); and NBI Liquid Alternatives ETF (NALT). Management fees for the four funds range from 0.35 per cent to 0.60 per cent.
BMO Global Asset Management is the largest bank provider representing 31 per cent market share, according to a research note by National Bank Financial. BMO launched its ETF business in 2009 and has since expanded the business to more than $50-billion in assets under management, second only to investment giant BlackRock Asset Management Canada Ltd.
RBC Global Asset Management launched ETFs in 2011 – two years after Bank of Montreal – and is known for its rules-based Quant ETFs and target maturity bond ETFs. Since then the bank has been moving up the ranks, becoming the country’s fifth-largest ETF provider, up from seventh in September, 2017. Today, RBC manages $5-billion in ETF assets.
TD Asset Management re-entered the ETF industry in 2016 with the launch of six index ETFs. It had first introduced ETFs back in 2001, but exited the business in 2006 owing to low trading volumes. Unlike its ETF counterparts, TD has seen lacklustre growth in its ETF business with only $80-million in assets under management, but recently filed for three actively managed ETFs.
Bank of Nova Scotia is the most recent to enter the industry launching four ETF portfolios in May, 2018. Prior to launching internal ETFs, the bank co-branded five actively managed Dynamic Funds ETFs with iShares, which has accumulated $1-billion in assets, according to NBF.
Canadian Imperial Bank of Commerce has yet to announce any upcoming plans to enter the Canadian ETF market with proprietary product. Currently, CIBC Asset Management does act as the sub-adviser to several ETFs from other providers in the industry.