Canada’s ETF industry recorded $13.5 billion in net inflows and 48 new fund launches in May, a report from National Bank Capital Market (NBCM) shows.
Equity funds took in a large chunk — $8.5 billion — of the net inflows, compared with $10.1 billion a month earlier. All-equity asset-allocation ETFs accounted for $2.1 billion of May’s total inflows, the research report noted.
On a regional basis, international equity ETFs drew the most investment dollars, recording $3.9 billion in net inflows. U.S. equity ETFs were next in line, with $2.5 billion gathered, followed by Canadian equity ETFs, with $2.1 billion.
In terms of sectors, only materials and health-care equity ETFs were in positive territory, taking in $98 million and $57 million, respectively. Meanwhile, among other equity ETF categories, utilities suffered $155 million in net redemptions, followed by financials at $149 million, “other” at $138 million, technology at $62 million, energy at $36 million, and real estate at $33 million.
Fixed-income funds gathered $3.1 billion in net inflows in May, which NBCM called “a noticeable rebound from April,” when they took in $922 million.
“All categories and maturities had strong inflows,” the report said of fixed-income funds.
In terms of maturity, broad/mixed bond funds saw the most investor interest in May, receiving $1.8 billion in net inflows. In terms of fixed-income fund type, Canadian aggregate bond funds were a crowd favourite, taking in $823 million.
Multi-asset equity ETFs recorded $1.2 billion in creations, down from $1.4 billion the previous month.
Commodities ETFs gathered $124 million, down slightly from $201 million in April.
Inverse-leveraged and leveraged ETFs pulled in $621 million, nearly unchanged from $651 million a month prior. Of May’s total, lightly-leveraged funds took in the bulk of inflows, at $579 million.
Crypto-asset funds suffered “small” net outflows — $33 million — in May, compared to $5 million in net redemptions the month before.
ESG ETFs, on the other hand, are “making a subtle comeback” this year, the report said. They recorded net inflows of $281 million in May, mostly led by creations in the broad U.S. ESG category. By comparison, the fund category enjoyed $550 million in net creations the month prior.
There was also one ESG ETF delisting in May, the Franklin ClearBridge International Growth (TSX: FCSI).
At the same time, a “whopping” 48 new ETFs hit the market across nine providers, with fund launch activity “led by an expansion in active, multi-asset, commodity, single stock and income-oriented products,” NBCM noted. Several providers also expanded their ETF series offerings.
Year-to-date ETF flows hit $87 billion by the end of May, which the report noted is the highest level by this time of year on record. This brings the ETF industry’s total assets under management to $857 billion.