Mutual funds produced $111.8-billion in net sales from January to Nov. 30, which is almost four times higher than the same period a year ago.ayo888/iStockPhoto / Getty Images
In a year when stock-picking and meme stock mania were all the rage, mutual funds and exchange-traded funds (ETFs) were still the best choices to provide advisors and their clients with the diversification they needed in portfolios.
Investment funds had a remarkable year even though they did not generate the same headlines as equities during 2021. Mutual fund and ETF total net sales and assets under management (AUM) surged in comparison to 2020, according to the most recent Investment Funds Institute of Canada data.
Mutual funds produced $111.8-billion in net sales from January to Nov. 30, up significantly from $23.6-billion a year earlier. Mutual funds also had $2.03-trillion in total net AUM on that date, up from $1.78-trillion at the end of 2020.
Similarly, ETFs had net sales of $53-billion from January to Nov. 30, up from $37.6-billion a year earlier. In total, ETFs had $335.9-billion in net AUM on Nov. 30, up from $257.3-billion on Dec. 31, 2020.
Here are 10 articles on investing strategies using mutual funds and ETFs published on Globe Advisor this past year:
Five travel, leisure, and entertainment ETFs to play the post-pandemic recovery
Many travel, leisure, and entertainment stocks – as well as ETFs focusing on this theme – rallied earlier this year on bets of a post-pandemic recovery once the COVID-19 vaccine roll-out had begun. Investing in thematic ETFs for a travel recovery play – while less risky and easier than trying to pick winning stocks – should be a shorter-term, tactical bet as opposed to a core holding in an investment portfolio, says Daniel Straus, director of ETFs and financial products research at National Bank Financial Inc. in Toronto.
Is it worth holding on to a fund that has had a triple-digit gain?
Investors in more than two dozen U.S. and Canadian equity mutual funds and ETFs experienced the good fortune of seeing increases of more than 100 per cent in 2020. Now, they’re asking, will the good times last or is it time to sell? That was the question Jeffrey Ptak, chief ratings officer at Morningstar Inc. in Chicago, asked as he saw that 18 U.S. equity funds had triple-digit gains last year – the most since 2009. Nine Canadian equity funds also rose by that same margin in 2020. The title of his report, What to Expect From Funds After They Gain 100 per cent or More in a Year? Trouble, Mostly, provides a hint.
How Canadian fund managers are betting on the bitcoin boom
Famed U.S. investor Warren Buffett blasted bitcoin as “probably rat poison squared” a few years ago. Despite his comments and bitcoin’s trademark volatility, the world’s most popular cryptocurrency has been gaining more respect. More U.S. institutions and notable investors – from Bill Miller to Paul Tudor Jones and Stanley Druckenmiller – own bitcoin as digital gold. Here in Canada, some fund managers are finding ways to offer investors exposure to this nascent digital asset as well.
Robert Cohen of 1832 Asset Management sees many reasons to hold on to gold
There are plenty of pundits speculating on where gold GCZ21 will go next, but Robert Cohen, vice-president and portfolio manager at 1832 Asset Management LP in Toronto, says a better question is: How much gold do you want as a long-term portfolio anchor? In an interview with Globe Advisor, Mr. Cohen discussed his investing philosophy, some favourite stocks, and why investors should take a longer-term view with gold.
ETFs to ride on an electric vehicle boom
Global electric vehicle sales surged by 41 per cent in 2020 with a record three million new vehicles registered compared with the previous year, according to a report by the Paris-based International Energy Agency. In addition, the number of electric cars, vans, heavy trucks, and buses on the road could reach 145-million globally by 2030, or 230-million if governments accelerate efforts to reach international energy and climate goals, the report suggests. Given these rising adoption rates, investors seeking to ride this trend need to look under the hood of electric vehicle ETFs because their holdings can differ widely and vary in volatility.
‘Advisor-driven’ ETF aims to provide operational advantages
Advisors who are looking to overcome some of the operational challenges of owning the Big Six U.S. technology stocks can consider Evolve FANGMA Index ETF TECH-T, an equal-weighted collection of the six top technology securities. The concept is that instead of spending around US$7,000 to purchase one share of each of these companies, the ETF offers the full suite for about $12 per unit (at current prices). Furthermore, advisors can hold these U.S. names in a Canadian investment vehicle, which eliminates the need for the different types of reporting required for holding U.S. assets over a certain value.
Skilled management drives long-term mutual fund success
The world has gone through many market-moving events over the past 15 years. Through it all, a select group of mutual funds has thrived by hunkering down and simply buying into the right stocks. Technology-related mutual funds – TD Science and Technology Fund, Canada’s top-performing mutual fund over the past 15 years, Signature Global Technology Corporate Class and TD Entertainment and Global Communications Fund – topped the list. Since 2005 as they have all outperformed the average annual return of their major technology benchmark indexes.
What trends will drive the next phase of the ETF industry’s torrid growth?
There’s no shortage of choice for ETF investors in Canada, with 39 asset managers offering more than 1,000 funds listed on Canadian exchanges – and always more products in the pipeline. Many new ETFs are thematic ones that invest in a particular investment category, says Prerna Chandak, vice-president of ETFs at Mackenzie Investments. While some themes will have staying power, others will lose favour and disappear, she adds. That ebb and flow is “normal” in a growing market.
Six ETFs for portfolio downside protection
It’s not clear whether a pullback or a correction could be in the offing, but risks appear to be rising. Investors can move into cash or bonds to preserve capital, but it’s difficult to time the market. Defensive ETFs are one way to maintain equity exposure, and potentially feel less pain in a market downturn. Daniel Straus, director of ETF research and strategy at National Bank Financial Inc., David Kletz, vice-president and portfolio manager, Forstrong Global Asset Management Inc., and Pavan Khaira, associate, investment products and platforms, iA Private Wealth, share their top defensive ETF picks.
Interest in space-related investments takes off with new ETFs
Space may be “the final frontier,” but it’s becoming easier for advisors and their clients to invest in humankind’s desire to explore beyond Earth’s atmosphere. Three new ETFs focused on investing in space-oriented equities launched this past spring. ARK Space Exploration & Innovation ETF ARKX-A from Catherine Wood’s New York-based ARK Investment Management LLC, launched on March 30. Emerge Canada Inc. introduced a Canadian version of the ETF, which is subadvised by ARK Investment Management, that same day – Emerge Canada Space Exploration ETF EAXP-NE. The third was Harvest Space Innovation Index ETF ORBT-T, which started trading on April 1.