- Rapidly growing category attracted a record $41 billion in flows in 2020, with 115+ new offerings launched
- ETF sector expected to continue to grow in 2021 through increased investor awareness, more Canadian-listed funds and pressure on providers to expand their offerings
TORONTO, ON – January 26, 2021 – Mackenzie Investments today released its 2021 ETF Outlook Report which provides an overview of the Canadian Exchange Traded Fund (“ETF”) industry in 2020 and identifies the key trends that will shape this investment category in 2021.
The report noted that, as the world celebrated the 30th anniversary of the first ETF in 2020, a growing awareness among Canadian investors about the advantages ETFs provide fueled continued adoption. Highlights from the year included:
- Record Breaking Flows: $41 billion in assets poured into the industry in 2020, eclipsing the record established in 2019 in just seven months. At year’s end, total assets under management (“AUM”) stood at a record $257 billion, up from $192 billion in 2019.
- New Offerings: More than 115 new ETFs were launched in Canada in 2020. There are now more than 1,000 Canadian-listed ETFs available from 39 providers.
- Most Popular Categories: Equity ETFs continued to be the most popular asset class in Canada, taking in more than $23 billion in AUM in 2020. Fixed income also performed well, bringing in more than $13 billion in AUM in 2020.
“Despite the volatility we experienced during the year, Canadians continued to adopt ETFs in record numbers,” said Michael Cooke, Senior Vice-President & Head of ETFs, Mackenzie Investments. “With their transparency, cost effectiveness and flexible passive portfolio tools, we expect ETFs will continue to help both retail and institutional investors navigate uncertain markets in 2021.”
Looking Ahead to 2021
The Mackenzie report also identified key trends the firm believes will shape the Canadian ETF space in 2021. These include:
- Room to Grow: Compared to the U.S., the Canadian ETF market is relatively smaller and still maturing. Demand from investment professionals and investors will inevitably result in larger allocations from more investors as the benefits of ETFs become more apparent.
- Increasing Availability of Canadian-listed ETFs: More products designed for the needs of Canadian investors will give them more reason to use Canadian-listed ETFs instead of U.S.-listed ETFs. Canadian-listed funds offer investors many advantages such as the choice of currency exposure and therefore may not be impacted by currency fluctuations. As well, other factors such as the timing of currency conversion and withholding taxes applied to specific asset classes make U.S.-listed ETFs suboptimal for certain investment accounts as compared to Canadian-listed ETFs.
- Pressure on Providers: Investors will be looking for providers that offer a full suite of ETFs. This will put pressure on investment firms to provide a variety of well-priced products that fit a wide range of investor needs.
The full report can be found at www.mackenzieinvestments.com.