Exchange traded fund market expected to double in the next five years

By The IJ Staff | January 31 2019 11:30AM

Photo: Freepik

A new report released today by BMO Global Asset Management projects that the global ETF industry will more than double to US$10 trillion over the next five years. The Canadian industry is expected to grow at a faster rate to C$400 billion.

BMO GAM’s annual ETF Outlook Report, says that in 2018 the global ETF market hit a record high of US$4.7 trillion assets under management at the end of the year. The number of ETFs available reached 6,483 globally, for an increase of almost 12 per cent from the previous year.

The report says the Canadian ETF market grew to C$156 billion AUM with inflows of C$20 billion. The Canadian equity ETF with the most inflows last year was BMO S&P/TSX Capped Composite Index ETF (ticker: ZCN), that had more than C$1 billion in net flows.

"Investors look to ETFs as an effective, transparent, low cost asset allocation tool," said Kevin Gopaul, Global Head of ETFs, BMO GAM. "The diversification and trading efficiency that ETFs offer has become more important than ever as volatility has returned to global markets. The value of positioning with traditional passive ETFs and new active ETFs was evident during the market corrections in the fourth quarter."