The exchange-traded funds (ETFs) industry is going strong this year with double-digit growth in assets under management (AUM), according to a review from the iShares ETF business of Toronto-based BlackRock Asset Management Canada Ltd.
According to the latest Canada ETF Industry in Review Report, Canada’s 259 ETFs grew to $53 billion in AUM and the ETF industry had $1 billion in net inflows in September. Overall the industry has seen a 20.7% growth since Dec. 30, 2011.
“We have seen very strong growth rates in ETFs as a category in the past five to ten years in Canada as well as globally,” says Mary Anne Wiley, managing director, head of iShares Distribution at BlackRock Canada. “Year to date in Canada, we’re on track to smash previous records.”
Overall during the third quarter, Canadian ETFs added $2.1 billion in net new assets. iShares ETFs led the pack with 76% market share and $41 billion in AUM followed by BMO with 14% market share and $7.5 billion in AUM.
Fixed income and balanced funds saw the biggest increase in AUM growth (11.4% each). The report cites a continued desire for yield as the reasoning behind the interest in fixed-income.
Part of the reason for the growth in ETFs is because they fit the low-return environment of today’s market and the general sentiment of investors. ETFs offer investors diversification, less risk, liquidity and lower cost than traditional investment options, says Wiley. “ETF investors have tried exchange-traded funds and they’ve had a good experience with them,” she says, “and more and more they’re embracing them as way to get access to the market.”