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etfs

Canadian ETFs added $1.5 billion in April, led by inflows to Canadian equity, thematic equity and Canadian aggregate bonds, bringing the total year-to-date inflow to $15 billion. Inflows slowed down in April, but remained positive despite the wide selloff in equity markets.

Canadian equity ETFs once again saw the largest inflow among the equity asset class, representing 86% of the total equity flows for the month. Some $666 million of this demand belonged to ESG-focused ETFs. National Bank’s NBI Sustainable Canadian Equity ETF (NSCE-T) amassed $522 million in April, the largest single ETF inflow for the month, led by apparent institutional subscriptions.

Fixed income ETFs gathered $645 million in new money, most of which went to Canadian aggregate bond products, despite major aggregate bond indices having suffered significant losses year-to-date. iShares Core Canadian Universe Bond Index (XBB-T) led the group with $220 million in net flows.

Cryptocurrency ETFs suffered their biggest outflow since their initial launch in February of last year. The Purpose Bitcoin ETF (BTCC-T) recorded $318 million of outflows throughout April, as the price of Bitcoin dropped to its lowest level in two years. 3iQ, a notable issuer of crypto focused products, saw $87 million in outflows, representing over 5% of their total AUM.

The velocity of new ETF launches relaxed this month, with only three new issues, all from CI Global Asset Management. The CI Floating Rate Income Fund (CFRT-T) invests in floating rate securities, which help mitigate the impact of rising interest rates. Floating rate securities have fared better than other fixed income categories year-to-date, due to inflationary pressures and hawkish central banks taking a toll on bond prices. The fund is actively managed and has the lowest management fee of any floating rate ETF in Canada at 0.35%. CI also launched the ETF series of the CI Global High Yield Credit Private Pool (CGHY-T). This fund invests in non-investment grade corporate bonds and aims to generate income and potential capital appreciation. The ETF charges a management fee of 0.55% and is also offered in US dollar units.

During the month, CI Global Asset Management completed their previously announced merger of several ETFs as part of its continuing strategy to modernize its product lineup. Notably, three of their factor-based Canadian equity products were terminated and converted to units of the CI WisdomTree Canada Quality Dividend Growth Index ETF (DGRC-T). Recall that CI Financial purchased WisdomTree Investment Inc.’s Canadian business back in 2020, including their 14 TSX-listed ETF products. The move should also benefit unitholders as the continuing funds have larger asset bases, thereby increasing trading efficiencies.

Ben Kleinberg is Product Manager at Inovestor