Exchange traded fund assets continued their growth through March 2012 to reach a new record high of $49 billion, according to figures released Wednesday by the Canadian ETF Association.
The CEFTA says the ETF industry could surpass $50 billion in the very near future, if assets continue to grow at their current pace.
Assets have grown by 18.1% since last March when they hovered at just over $41.5 billion.
Each month, the CETFA compiles the sales data for the entire Canadian ETF industry with the help of Investor Economics. In order to determine net sales, the CETFA looks at the amount of money that is used for net creations, or the creation of new ETF units. If any ETF experiences net creations, it means more units of that ETFs are being bought than sold. If the industry is in net creations, positive sales are occurring.
According to Investor Economics, net creations for Canadian-listed ETFs amounted to $1.6 billion for the month, which represents roughly 3.4% of beginning assets. Net creations were also highly concentrated amongst the 25 best-selling ETFs, with this group accounting for 81.2% of net creations in March. Though a variety of mandates are present among these 25 ETFs, nine ETFs in the ranking provide exposure to fixed income securities, while eight have underlying exposure to common equities.Canadian equity ETFs were the best selling asset class with $522 million in net creations, with ETFs providing exposure to investment grade fixed income securities backed by corporate issuers placing second after attracting $340 million.
Concentration within the ETF industry remains high with the largest 25 ETFs accounting for 75% of the industry, with the remainder dispersed among 219 ETFs.
Only three asset classes sustained net redemptions. North American equity ETFs sustained net redemptions of $15 million, while both agriculture and financial sector equity ETFs experienced net redemptions of $9 million.