Canada’s ETF industry sets new monthly inflow record in March

It also brought total ETF assets under management to $544.8 billion.

The inflows were distributed across all asset classes, with fixed-income ETFs leading the way at $6.3 billion. Equity ETFs followed closely behind with $5.9 billion in inflows.

Most categories under the fixed-income fund umbrella saw inflows. The greatest boost went to money market ETFs, which gathered $2.2 billion, Canadian aggregate bond ETFs, with $2 billion, and Canadian corporate bond ETFs, with $1.6 billion.

Foreign bond ETFs and preferred share/convertible ETFs reported redemptions amounting to $117 million and $17 million, respectively.

The equity asset class saw spillover effects from U.S. President Donald Trump’s moves to upend world trade, with investors “sending assets overseas,” according to the report.

While U.S. equity ETFs were still in positive territory with inflows of $737 million, they were outshined by Canadian equity ETFs at $1.4 billion and international equity ETFs at $3.8 billion.

“International equity ETFs saw a sudden $3.8 billion explosion in demand as investors flock overseas to sidestep a potentially damaging trade war instigated by the President’s tariff announcements early in the year,” the report said.

“While this trend existed on a smaller scale for the past few months, it was driven by new desire to diversify away from the potentially overvalued U.S. equity market as its 2-year bull run meets a correction.”

The report also noted that financials ETFs made up the bulk of the inflows among Canadian equity ETFs in March. Low-volatility ETFs made a comeback too, with $829 million flowing into the funds, which the report attributed to “bearish sentiment” beginning to rise on trade war concerns.

Meanwhile, developed markets equity ETFs gathered $2.6 billion, a new record for the category.

Commodities ETFs pulled in $165 million, which primarily went to gold bullion ETFs.

Multi-asset ETFs received $787 million in inflows in the month.

Inverse/levered ETFs reported inflows amounting to $393 million.

Cryptoasset ETFs recorded a meagre $8 million in inflows.

ESG ETF inflows added $172 million in March, the third consecutive month of inflows into the category.

Canada’s ETF industry also welcomed 24 new funds in the month, including funds that use leverage as a strategy. Target-date bond, single-factor, and covered-call ETFs also entered the market.