As equity markets rebounded in November, ETF investors were in a buying mood.
Almost $4.9 billion flowed into Canadian ETFs last month, the second-largest monthly inflow this year, with the lion’s share going to equity funds, according to National Bank Financial.
“After a few moribund months of equity demand, the asset class made a comeback with $2.7 billion [in] inflows in November, more than half [the] month’s total flows,” a report from National Bank said.
The S&P 500 index rose 8.9% in November, its biggest monthly gain in more than a year, while bonds also rallied as yields declined after spiking in October.
Broad market-cap weighted index ETFs were the primary beneficiaries, with $686 million flowing into the iShares S&P/TSX 60 Index ETF, $490 million to the BMO S&P 500 Index ETF and $185 million to the Vanguard S&P 500 Index ETF. The iShares Core S&P/TSX Capped Composite Index ETF also brought in $643 million in November.
Flows into equity funds last month accounted for almost one-quarter of the $10.98-billion total so far in a year that’s been dominated by fixed income ETFs. That momentum slowed in November, with fixed income funds bringing in $974 million.
High-interest savings account (HISA) and money-market ETFs posted another strong month, with $676 million in net flows. The HISA funds remained popular despite regulatory changes coming in the new year that may affect the yields offered.
Long-term bond ETFs saw $666 million in net flows and target-date funds drew $250 million, while investors withdrew money from foreign and high-yield bond ETFs, the report said.
November’s “everything rally” included bitcoin, which this week soared past US$41,000 for the first time in over a year and a half. ETF investors piled back into cryptoassets, with $815 million in net flows last month. The inflows represented more than one-quarter of total assets in crypto ETFs at the start of the month, the report said.
For the year, $34.4 billion has flowed into Canadian ETFs, which now have almost $370 billion in assets under management, according to National Bank.