Fourteen ETFs launched in one month

Fall has brought a slew of new exchange traded funds: 14 ETFs were introduced in September 2019.

The main suppliers driving this flurry are RBC iShares and Fidelity with each launching five ETFs, according to the September issue of the Canadian ETF Flows bulletin, written by Daniel Straus, vice-president and ETF research analyst with National Bank Financial. The other participating suppliers are CI First Asset with two ETFs, and Horizons and Evolve Funds, with one fund each.

Response to multifactor approach

The five RBC iShares ETFs favour a single-factor approach. Three ETFs focus on the United States, targeting quality, momentum and value respectively. Two others concentrate on US small-cap stocks.

Fidelity has launched a suite of five actively managed fixed income funds available both as ETFs and ETF mutual funds. Three of them concentrate on high yield bonds, mainly in the US market, and the two others on Canadian bonds. 

Environment-friendly 

CI First Asset’s two new ETFs represent two versions of a fund linked to the social responsibility and environment index MSCI World ESG Select Impact. One is hedged in Canadian dollars and the other is non-hedged. The international index selects the securities of companies for which 30% of their sales are generated by social or environmental initiatives. Among the selection filters, the index considers firms’ efforts to reduce carbon emissions and implement strategies that do not use fossil fuels.

Horizons ETFs launched a growth-oriented ETF that aims for long-term capital growth. Instead of holding stocks, it forms a portfolio of ETFs based on equity and on the total return index (TRI).

Evolve Funds opted for an ETF comprising the stocks of companies that pay stable dividends. This fund follows the Solactive Dividend Stability Canada Preferred Share Index, which tracks the returns of preferred shares of over 50 companies. 

ETFs launched in September 2019

Two exits, no entries

No new suppliers appeared in September, in a market that regularly welcomes new players. Instead, two suppliers, First Block and Galileo, bowed out, bringing the number of players in Canada to 35. Each had only one ETF in the running: First Block with Blockchain ETF FBCN, and Galileo with ETF GOGO, an ETF based on precious metals.

$16 billion to date in 2019

In September, ETFs garnered investments of over $437 million. From the start of the year to September 30, ETFs drew total inflows of $16 billion. On the same date last year, the market had generated fund inflows of $15 billion, the National Bank Financial bulletin reports.

Cash flows of $437 million in September nonetheless represent a slowdown from the month of August. 

The fund flow continues

The spate of new ETFs shows no sign of dwindling. Another bulletin written by Daniel Straus, ETF Industry News Update, states that AGF launched two ETFs on October 7: AGFiQ US Market Neutral Anti-Beta CAD-Hedged ETF (QBTL) and AGFiQ US Long/Short Dividend Income CAD-Hedged ETF (QUDV). The two funds charge MERs of 0.55 %.

First Trust recently submitted the preliminary prospectuses of two ETFs, slated for a November launch: First Trust Cboe Vest U.S. Equity Buffer and First Trust Cboe Vest U.S. Equity Deep Buffer. “Buffer” implies a strategy that caps returns but protects investors against losses for a given period, namely one year starting in November for these two ETFs. Management fees of 0.85% are foreseen. In August, the supplier was the first to launch this strategy in Canada, the bulletin says.