Based on the Scotia ETF EDGE reports From February 5 to March 1, spanning a four-week period, Canadian ETFs saw an inflow of $6.1 billion, a slight rise from the previous month. The bulk of the inflows in February came from equity with nearly $4.0 billion in net creation during those four weeks while fixed income and cash ETFs accounted for $2.0 billion and mixed allocation for $0.42 billion.
Bitcoin continues to climb throughout February reaching historic highs, while the cryptocurrency asset class in Canada experienced a net redemption of $142 million. The bitcoin rally provided tremendous fuel for the increased trading activity. Some investors during the month likely switched into U.S. cryptocurrency ETFs, which saw very large inflows, due to their lower fees. Other investors may have cashed out of their Canadian bitcoin ETF holdings as prices reclaimed levels just prior to the arrival of crypto winter.
The age of artificial intelligence (AI) is officially the successor to the Information Age that has taken over the daily lives of everyday people. While AI has been around for over a decade and featured in countless futuristic films, its impact on the stock market is relatively young. The month of February belonged to NVIDIA Corporation. The tech giant is the first semi-conductor firm to have a valuation of $2 trillion. Similar to the age of Internet, AI is seen as a catalyst for the market rally. Usages for the product can spread across the semi-conductor space and possibly other sectors. There are expectations that demand for hardware for AI computing is just beginning.
The Scotia US Equity Index Tracker ETF (SITU-NE) experienced the largest inflows at $0.64 billion, followed by the Vanguard S&P 500 Index ETF (VFV-T) at $0.49 billion. Investors have continued moving towards large-cap US equities in February and away from Canada’s big banks during earnings season.
Additions
In February, the Canadian market witnessed the introduction of eleven new ETFs, predominantly brought forth by two leading providers: Hamilton ETFs and AGF Investments.
Hamilton ETFs
Hamilton added four new ETFs this month, all of which are part of their yield maximizer series which use an active covered call strategy to reduce volatility and provide monthly income.
The Hamilton Gold Producer Yield Maximizer ETF (AMAX-T) invests in North American equities involved in the production of gold. The Hamilton Energy Yield Maximizer ETF (EMAX-T) provides exposure to North American energy companies. The Hamilton U.S. Financials Yield Maximizer ETF (FMAX-T) provides exposure to an equal-weight portfolio of U.S. financial service companies. Lastly, the Hamilton Healthcare Yield Maximizer ETF (LMAX-T) offers an equal-weighted portfolio of U.S. large-cap healthcare companies.
AGF Investments
AGF Investments added three new ETFs this month. The AGF Global Real Assets Fund (AGLR-NE) is a multi-asset fund that provides exposure to global equities related to real assets such as infrastructure, energy, and real estate in addition to a 10% allocation to fixed-income securities. The AGF Total Return Bond Fund (ATRB-NE) targets higher bond yields using various types of fixed income securities. The AGF U.S. Small-Mid Cap Fund (ASMD-NE) offers exposure to potential growth opportunities in the U.S. small and mid-cap equity markets.
Other Providers
Evolve ETFs launched the Evolve Enhanced Yield Bond Fund (BOND-B-T) which is offered in both Canadian dollars and U.S. Dollars (BOND-U-T). The fund invests in U.S. fixed income securities, writing call options on 50% of the portfolio to offer monthly income.
Mackenzie Investments launched the Mackenzie World Low Volatility ETF (MWLV-T) which seeks long-term capital growth by investing in large-cap and mid-cap equities in developed global markets.
Finally, the TD Cash Management ETF (TCSH-T) provides exposure to high quality debt securities, including money market funds and ultra short-term fixed income securities.
Amy Mak, is senior financial analyst at Inovestor.
With a contribution from Darcy Keith of The Globe and Mail
At Inovestor, we believe that investors deserve access to the best financial information available. Leveraging our suite of award-winning research technologies, we go above and beyond to put that information at your fingertips. For more information, please visit inovestor.com