Equity ETFs in Canada brought in about $45-billion, topping the previous record by 48 per cent, but there were new highs in multiple categories.earlier in the fall, but a rush of bullish sentiment in December meant new money flowing into Canadian ETFs blew past the previous record of around $53-billion set in 2021, with inflows for the year topping $76-billion, according to a report from National Bank Financial. Where did it all go? In Canada, there were records almost everywhere you look.
Equity ETFs brought in about $45-billion, topping the previous record by 48 per cent. Fixed-income ETFs saw inflows of $24-billion, more than doubling the previous high. Commodities? New record. Active bond funds? Ditto. Options-based ETFs? Not even close. Asset allocation ETFs? Interest “exploded with a record haul,” the report says. It wasn’t just a Canadian phenomenon. The U.S. ETF industry had its best year, with inflows topping US$1-trillion for the first time. Globally, a new inflow record for ETFs had been set by the end of November,So, what changed? While demand for U.S. equities amid a surging bull market explains a great deal, there were other interesting trends at play beneath the surface.iShares S&P/TSX 60 Index ETF had a good three decades as Canada’s largest ETF, but it’s over. The pull of U.S. stocks moved Vanguard S&P 500 Index ETF to the top of the leaderboard last year after more than $6-billion in net flows.ESG ETFs saw annual outflows for the first time, with $1.6-billion moving out of the category in 2024. The report attributes most of the outflows to institutional redemptions from a few ETFs. While there were no ESG launches and 14 funds closed, the report said “clarification and consolidation” within the category could mean more opportunities for the remaining 120 ESG ETFs.with lower fees and higher trading volume. Crypto ETFs in Canada saw $1.1-billion in outflows. South of the border? Net inflows topped US$44-billion., with net outflows of $1.9-billion. CI High Interest Savings ETF led the redemption tables across all Canadian ETFs with almost $2.4-billion in outflows. The broader money market ETF category still pulled in $2.8-billion.when releasing new products. But while 53 per cent of ETFs are now actively managed, according to National Bank Financial, those funds only hold about 31 per cent of ETF assets., as they pile money into the funds at a greater rate than investors who rely on financial advisors for purchases. That’s affecting the popularity of certain funds. Based on assumptions made from evaluating trade sizes, National Bank Financial says DIY investors are the ones buying all-equity and growth asset allocation ETFs, as well as options-based ETFs that offer the highest yields (above 12 per cent). Advisors, on the other hand, are likely favouring balanced and conservative asset allocation ETFs and options funds with lower yields. The report notes that while higher-yielding options funds have seen greater inflows, a higher yield “will generally imply lower future growth prospects because of the mathematical nature of covered calls.”224 new ETFs launched last year in Canada and 61 were delisted, bringing the number of products to 1,497 and the number of issuers to 45. Despite the growth, the median assets under management for an ETF in Canada rose to $46-million, according to National Bank Financial, from $38-million five years ago
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