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Canadian equity-led ETF inflows in February

Energy, real estate, utilities and healthcare sector ETFs saw inflows, while technology, financial and materials sector ETFs saw outflows. Canadian equities remain attractive in the face of rising interest rates and a tight central bank environment, especially when compared to indexes that are primarily growth-oriented.

Inflows into fixed income ETFs were $163 million, with long-term Canadian government bond ETFs and cash leading the way. However, demand for commodity ETFs has slowed in Canada. Despite the fact that uncertainty has driven gold and silver prices up, investors have avoided billions of dollars in gold and silver. In February, the ETF withdrew $49 million from the commodities category. The crypto-asset ETF saw an inflow of $221 million, which coincided with a rise in the prices of Bitcoin and Ethereum.

The National Bank report also noted that last month was a strong one for ETF launches, with 19 new ETFs being introduced. Two new providers, Evermore and Mulvihill, made their debut.

After the start of a new year and rotation, the stock markets have had their worst year-on-year performance and the shift from growth to value is still at the fore.

The Russian invasion of Ukraine on 24 February sent shock waves across the world’s financial markets. The report noted that Russian securities may be held by Canadian ETFs that track emerging market indices or invest in developing market stocks or bonds.

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