ETF inflows in July shift beyond U.S. large-cap funds

Equities led the way with $2.6 billion in net new assets, dominated by flows into the U.S. and international regions, while Canadian equities suffered $1 billion in redemptions.

With concentration risk top of mind for many investors, equities ETF inflows started to shift from U.S. large-cap equities to small-cap, equal-weighted and financial sector ETFs, the report said.

Fixed-income ETFs recorded $1.7 billion in inflows in July, dominated by Canadian corporate bond ETFs, which saw $803 million in inflows. Ultra-short-term, midterm, target maturity and money market ETFs each received more than $200 million in flows.

Outflows in the fixed-income category were attributed to preferred shares, real return and sub-investment-grade ETFs. Together, these ETFs recorded outflows amounting to $211 million in July.

Led by asset allocation ETFs, multi-asset ETFs recorded inflows of $637 million.

Commodities ETFs attracted $42 million, led by gold bullion ETFs.

Cryptoasset ETFs also had modest inflows, totalling $69 million in July. This followed “some recently improved price performance and the slowdown of inflows into their relatively newer U.S.-listed ETF counterparts,” the report said. The category has lost $534 million in flows year-to-date.

ESG ETFs saw inflows of $171 million in July, after “a string of delistings and outflows,” the report said.

“Global bond and emerging market equity were the two most popular ESG categories in the month, perhaps reflecting some investors’ view that the ESG factor could help mitigate risks in the less efficient and more volatile market segments,” it said.

However, this was not enough to push the category into positive territory — year-to-date outflows for ESG ETFs sat at $767 million at the end of July.

July also saw the introduction of 19 new ETFs with various strategies, including a suite of CIBC target-maturity bond ETFs.

Year-to-date inflows reached $38.8 billion in the month.