In April, Canadian Fixed Income ETFs experienced a substantial inflow of $2 billion, with approximately $1.1 billion directed towards Money Market ETFs, according to National Bank Financial Markets. Given the current financial climate and prevailing uncertainty, it is not surprising that around $300-million flowed out of equity ETFs in the U.S. and Canada, primarily moving towards Fixed Income investments, particularly in money market ETFs and Canadian government bonds.
Overall, Canadian ETFs in April experienced a significant decline in inflows compared to the previous month, dropping from $7 billion to $2 billion, while Canadian equity ETFs saw the largest outflow, totaling $800 million. On the other hand, international equity markets continued to witness demand, resulting in a net inflow of nearly $1 billion, half of the month’s inflow.
Investors remain cautious due to ongoing analysis of the repercussions of bank failures in the United States. Consequently, they favoured international and emerging market stocks, perceiving them as posing lower risk and/or offering better value.