The market for exchange traded funds continues to grow in Canada, but ETFs still have a long way to go to unseat mutual funds as the number one investment vehicle in Canada.
Canadian ETFs raised $8.5 billion in net new assets in 2009, up from $7.1-billion in 2008, said a new report on the global ETF market from BlackRock Inc. a New York-based investment management firm and proprietor of iShares.
Canadian ETF assets have grown by 29.6% over the past five years to roughly $31-billion or 4.6% of all mutual fund assets in Canada.
“ETFs have grown consistently by 30% per year over the past five years demonstrating their appeal to investors in market conditions of all kinds – from the bull to bear to recovery,” said Heather Pelant, managing director, head of iShares Canada at BlackRock Asset Management Canada Limited.
“Without question, ETFs have become a popular and widely accepted tool that has fundamentally changed how institutional and retail investment advisors view the markets.”
With $25.4-billion in assets under management, iShares represents 80.7% of the total ETF market in Canada. Making up the remaining pie is Claymore Investments Inc. with roughly 11% market share. AlphaPro Management Inc. and their suite of Horizons Beta Pro ETFs account for 8% of assets and Bank of Montreal, the most recent entrant to the ETF game, makes up less than 1% of the total market.
Globally, ETF assets increased 45% to hit a record high of US$1-trillion at the end of last year, with assets for the ETF industry in the United States likewise climbed more than 40%, reaching an all-time high of US$705.5-billion.