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ETF industry enjoys record-high inflows amid pandemic crisis

The Canadian ETF sector also hit a record for the second year in a row in 2021, with $323 billion in assets and $53 billion in net new inflows. After welcoming 202 new ETFs and one new provider last year, Canada now has 1,177 ETFs from 40 ETF providers.

“ETFs once again proved their value as market access vehicles, as Canada became the first country to launch physical crypto ETFs, and equities captured record-breaking flows,” Ras said.

Looking to 2022, the report says that innovative companies are gathering pace on the back of life-changing trends including genomics, fintech, autonomous technology and next-generation internet. The energy behind environmental, social and governance (ESG) investments seen in 2021, it said, will continue to build.

The report also highlights investor expectations that price will continue to outperform growth, buoyed by a historical trend of continued economic reopening and strong price performance during periods of rising rates and increased inflation.

In addition, investors are employing ETFs to hedge against more aggressive central bank announcements, inflation fears and economic downturns, while still having broad fixed income exposure as a portfolio anchor. If inflation remains an immediate priority in 2022, BMO GAM said investors may have to take overweight positions in stocks or non-traditional fixed income.

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