Strong sales for Canadian ETF industry

The Canadian ETF industry saw nearly $2.8 billion in net creations reflecting a strong quarter in ETF sales despite market turmoil.

In order to determine net sales, CETFA looked at the amount of money that was used for net creations or the creation of new ETF units. If any ETF experiences net creations, it means more units of the ETFs are being bought than sold. If the industry is in net creations, positive sales are occurring. If it is in net redemptions, money is flowing out of the industry.

“During the third quarter, ETF inflows appeared to be broadly diversified across a wide range of asset categories,” said Howard Atkinson, chair of CETFA. “This underscores the strength of the ETF industry. You would expect there to be net redemptions in ETFs during a period of market volatility. Instead, investors are choosing to make ETFs an important part of their portfolios regardless of market conditions.”

CETFA found that ETFs that paid regular income distributions accounted for $960 million in net new sales reflecting a strong preference for yield-seeking ETFs.

The fixed income ETFs category saw $790 million in net creations on the quarter, increasing total year-to-date inflows into this category to $1.6 billion. This does not include covered call ETFs, which also make monthly income distributions. The specialty ETF class, which includes covered call ETFs, accounted for $391 million net creations during Q3.

While sales were diversified across a broad spectrum of categories, the top ten ETF asset gatherers for Q3 accounted for $2.1 billion of the net creations for the quarter.

The Top Ten