More investors will move their assets to exchange traded funds (ETFs) in 2013, says the ‘BMO Canadian ETF Outlook Report.’ This expected growth is due in part to growing investor awareness of the products, as well as changing ideas as to how ETFs fit in portfolios. The ETF market grew by 33 per cent in 2012 to $56.4 billion in assets under management and Canadian ETFs had $12 billion in inflows, the most ever. The benefits spurring the growth of ETF use include transparency, liquidity, tax efficiency, diversification, lower costs, and market returns. Looking ahead, the report identified trends in the ETF industry in the coming year such as stronger competition and possible new entrants as market share evens out across industry players.
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