Canadian ETF flows were steady in May, reaching $2.4 billion, National Bank Financial said in its monthly ETF report. The figure compares to a dismal $1.5 billion in flows in April amid market selloffs, and brings ETF assets to $18 billion so far this year.
Equities ETFs gathered $1.4 billion, with U.S equities claiming $877 million of that — the category’s “largest monthly inflow of the year so far, despite the S&P 500’s tiptoe towards bear market territory of a 20% drawdown from recent highs,” the report said.
Fixed income clocked in at $216 million in net flows, with cash alternative ETFs leading the way ($298 million).
Cryptoasset ETFs made a comeback with $565 million in flows — also the biggest monthly inflow so far this year for the category, the report said.
Since the crypto category’s inception last year, “Close to $7 billion have flowed into this asset class,” it said. “Nevertheless, the total AUM in Canadian crypto-asset ETFs is just $4.3 billion because of price declines in Bitcoin and Ethereum, a testament to how volatile and risky this new asset class can be.”
Multi-asset funds had $125 million in flows, though the report noted that two alternative ETFs had outflows (one with a market neutral-strategy and one with an anti-beta strategy). This suggested investors were “allocating away from equity market hedge positions in anticipation of a rebound,” it said.
Low-volatility ETFs had another month of outflows, though less so than the previous month ($96 million, compared to outflows of $411 million in April).
“Demand for low-vol ETFs seemed to sour dramatically in the aftermath of the 2020 pandemic selloff, although the pace of the outflows has been slowing down,” the report said.
Canadian-listed ESG ETFs had $159 million in new assets in the month, reaching $1.8 billion for the year so far. The two-month-old BMO Brookfield Global Renewables Infrastructure ETF pulled in $81 million in May, attracting the most flows in the category.
Year-to-date, commodities was the only category posting net outflows ($237 million). That stands in contrast to south of the border, where commodities ETFs have been gathering assets on widespread inflation fears, the report said.
The month had five new launches, including three thematic ETFs (two metaverse and one blockchain).