The Canadian exchange traded fund (ETF) market is expected to keep growing for the rest of this year and into 2015.

A report issued by BMO Global Asset Management notes that the Canadian ETF industry currently has $70.1 billion in assets under management, up 11.1% from the end of 2013. BMO suggests that the trend will continue into next year as investors look for income in the current low-interest rate environment, and points out that more than $2.5 billion has flowed into Canadian fixed income ETFs year to date while Canadian equity ETFs have attracted $529 million.

The report says that three factors will help to fuel the growth of ETFs. First of all, consumers have an increasing number of ETFs products to choose from and are benefitting from more competition in the marketplace. Secondly, ETFs offer low-cost, tax-efficient access to international markets. Lastly, the report says that "smart-beta" products will continue to appeal because they offer specific investment outcomes over the long term.

"ETFs have captured the attention of the market generally, but have been particularly significant for fixed income," reads the report. "Investors are reacting to market changes – specifically the ongoing American economic recovery – and are looking to position their bond portfolios in response to them. This could expand beyond Canadian bonds to U.S. and global fixed income ETFs."