Domestic ETFs See Strong Momentum


    “The domestic ETF industry has seen strong momentum in 2015. Its user base has expanded as investors grow more comfortable with these funds,” says Rajiv Silgardo, co-CEO at BMO Global Asset Management. Its ‘Canadian ETF Outlook 2015’ shows the Canadian ETF industry stands at $84 billion in assets under management, an increase of more than 10 per cent over the end of 2014. Equity ETFs have accounted for $4.5 billion in inflows so far in 2015 and fixed income ETFs $4.7 billion. There are two key factors impacting the industry. The report noted that, given the natural liquidity between ETF buyers and sellers on the exchange, it may be more efficient to trade an ETF compared to the underlying asset class. Additionally, ETFs have intra-day liquidity on the exchange where the market bid and ask prices provide full transparency into the trading costs. It suggests ETFs will continue to gain in popularity in various geographies because of their low cost and lack of fee complexity in markets that are undergoing structural reform such as the UK and Australia, as well as in North American markets with more usage by larger institutional players.