Investors may have had a rough ride with stock markets this year, but a new report from BMO Global Asset Management outlines the continued popularity and growth of ETFs in Canada with flows reaching $17 billion over the first half of the year.
"ETFs continue to prove their worth both strategically and tactically as access vehicles for satellite positions and as core building blocks in portfolios,” said Mark Raes, Head of Product, BMO Global Asset Management Canada. “Even amid heightened inflation, ETFs that focus on specific areas of the market such as infrastructure can provide a good hedge and offer protection for investors."
Increasing inflation has hit growth stocks hard, but long-term, ETFs will continue to influence Canadians’ behaviours and routines and have the potential to power equity markets in the future, said Raes.
Despite uncertain markets, geopolitical events and the pandemic, ESG ETFs continue to attract investors, led by institutional flows, said Erin Allen, vice president, Online ETF Distribution.
Allen said BMO's suite of ESG ETFs target a sector neutral exposure, which helps, under normal circumstances, to keep performance in line with the broad market.
The report says Canadian energy sector ETFs have seen inflows of $730 million year to date. Utilities showed positive performance so far this year. Dividend ETFs saw $1.3 billion in net new flows year to date.