Net inflows into Canadian exchange-traded funds (ETFs) exceeded $8 billion in October, National Bank Financial Markets (NBC) analysts say, pushing the year-to-date inflow total past the highest yearly total, set in 2021.
ETF inflows for the year through October reached $57 billion, the bank’s October ETF report says. “If ETF asset-gathering continues at this rate for the remaining two months of 2024, inflows may top $70 billion by year-end,” the analysts wrote — close to double the inflows recorded in 2022 or 2023.
A new record isn’t certain, because ETF flows in November and December could theoretically be negative, says Tiffany Zhang, NBC’s vice-president of ETFs and financial products research, in an email to Yahoo Finance Canada.
“However, we typically have seasonal strength going into the last two months as investors engage with tax loss harvesting and year-end planning,” she wrote. “So, it would be pretty rare to have two months of outflows.”
October’s gains were across all asset classes except cryptocurrency funds, which saw outflows of $81 million for the month. Equity and fixed-income funds had the largest inflows at $4.1 billion and $3.1 billion, respectively.
In the equity class, inflows exceeded $1 billion each for U.S. funds, Canadian funds and global funds. The top U.S. equity funds by inflow in October were index funds from Vanguard (VFV.TO), BMO (ZUE.TO) and Scotia (SITU.NE), NBC says. Among the Canadian funds, BMO’s bank index fund (ZEB) had “its largest day of inflows in history with $649 million on a single date in early October,” the report notes.
In the fixed income class, net inflows were driven by the Canadian aggregate bond category, which saw $1.9 billion in inflows, much of them to CI’s aggregate bond index ETF (CAGG.TO) which alone saw inflows of $1.1 billion.
October saw 15 new ETFs launched in Canada, including two from J.P. Morgan and four from Capital Group, both new providers in the Canadian market. Fourteen of the 15 new funds are actively managed. The only new passive fund is BMO’s ZIQ fund, which tracks the MSCI EAFE Quality Index.
John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf.
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