Canadian ETF launches: A bevy of new sector and yield funds
Based on the Scotia ETF EDGE reports from February 3 to February 28, spanning a four-week period, Canadian ETFs saw an inflow of $14.1 billion. Equity flows took in the most inflow of capital with $5.5 billion, followed by fixed income with $3.6 billion. Inflows into ETFs of mixed allocation attracted $3.6 billion. Investors are continuing to park their money in cash products as the sector saw $0.5 billion in inflows. Crypto garnered a slight increase with $0.025 billion compared to last month’s retreat of $0.2 billion.
In recapping the movers and shakers in the market for February, Tesla was plastered across the chyrons with its sharp decline in value falling below US$1 trillion market cap. Bitcoin also experienced a major sell off as its unit price plunged to a month-end close at around $80k USD, a stark contrast to last year’s bullish run. On the positive side, Nvidia’s CEO Jenson Huang quelled investor concerns over DeepSeek’s impact in the AI trade with the company’s fiscal earnings report. The dramatic increase in revenue stems from Nvidia’s data center segment, which encompasses the company’s graphics processing units (GPUs) powering most generative AI applications. Despite the thin silver lining for the AI play, the overall backdrop was a lot of uncertainty in the market.
The BMO Global Equity Fund (BGEQ-T) experienced the highest net inflows with $1.06 billion. The BMO Equal Weight Banks Index ETF (ZEB-T) recaptured some of last month’s exodus with inflows of $0.57 billion while Global X High Interest Savings ETF (CASH-T) trailed slightly with $0.32 billion. BMO S&P 500 Index ETF (ZSP-T) experienced the largest net outflows of $0.58 billion, followed by iShares S&P/TSX 60 Index ETF (XIU-T) with $0.34 billion and BMO MSCI EAFE Index ETF (ZEA-T) with $0.28 billion. Investors are adapting their portfolios away from North America due to fears of more market-moving changes at the policy level after economic data points to a slowing economy and tariff uncertainty.
Additions
February was host to 33 new ETFs that joined the Canadian market, with BMO and Purpose Investments as the primary issuers for the month.
BMO Asset Management
BMO Asset Management launched its new BMO SPDR Select Sector Index ETFs which concentrates on sector-based investing. This family of funds give investors access to all 11 Global Industry Classification Standard System sectors of the S&P 500 in both unhedged and hedged units on a Canadian exchange. Each BMO SPDR Select Sector Index ETF seeks to replicate the performance of an index comprising of large-cap companies in each respective sector as follows:
BMO SPDR Materials Select Sector Index ETF (ZXLB-T, ZXLB-F-T)
BMO SPDR Communication Services Select Sector Index ETF (ZXLC-T, ZXLC-F-T)
BMO SPDR Energy Select Sector Index ETF (ZXLE-T, ZXLE-F-T)
BMO SPDR Financials Select Sector Index ETF (ZXLF-T, ZXLF-F-T)
BMO SPDR Industrials Select Sector Index ETF (ZXLI-T, ZXLI-F-T)
BMO SPDR Technology Select Sector Index ETF (ZXLK-T, ZXLK-F-T)
BMO SPDR Consumer Staples Select Sector Index ETF (ZXLP-T, ZXLP-F-T)
BMO SPDR Real Estate Select Sector Index ETF (ZXLR-T, ZXLR-F-T)
BMO SPDR Utilities Select Sector Index ETF (ZXLU-T, ZXLU-F-T)
BMO SPDR Health Care Select Sector Index ETF (ZXLV-T, ZXLV-F-T)
BMO SPDR Consumer Staples Select Sector Index ETF (ZXLY-T, ZXLY-F-T)
These sector-based ETFs offers investors with an additional avenue to U.S. markets as well as a cost-effective hedge against currency risk.
Purpose ETFs
Purpose Investments has expanded its Yield Shares Suite with seven new ETFs, offering investors exposure to leading global companies while generating enhanced monthly income. The new additions include single-stock ETFs for UnitedHealth (YUNH-NE), Broadcom (YAVG-NE), Costco (YCST-NE), Netflix (YNET-NE), Coinbase (YCON-NE), and Palantir (YPLT-NE). The Tech Innovators Yield Shares Purpose ETF (YMAG-T) invests in a portfolio of leading global technology and innovation-driven companies. These ETFs employ a covered call strategy with moderate leverage, balancing income and growth potential. Investors benefit from monthly distributions, reduced volatility, and tax-efficient income generation. Purpose’s Yield Shares lineup continues to evolve, providing innovative solutions that align with changing market dynamics.
Global X ETFs
Global X Investments Canada announced the commencement of U.S. dollar trading of Global X 0-3 Month T-Bill ETF (CBIL-U-T) on the Toronto Stock Exchange. The Fund seeks to provide interest income through exposure to Government of Canada Treasury Bills with remaining maturities generally less than 3 months, but with U.S. dollar exposure.
Global X Artificial Intelligence Infrastructure Index ETF (MTRX-T) offers exposure across the AI value chain as it invests in companies providing the essential infrastructure for AI applications. AI Infrastructure includes companies involved in various aspects of AI development, from power, energy and raw materials supply and management to hyper scaling data center operators.
Other ETF Launches
LongPoint Asset Management Inc. launched the Return Stacked Global Balanced & Macro ETF (RGBM-T), an ETF with a global balanced strategy consisting of global equity securities and fixed income securities, and using leverage and derivative instruments, to stack on the returns of a systematic macro strategy that provides exposure to major global asset classes including but not limited to equity indices, volatility indices, fixed income indices, interest rates, commodities and currencies.
Desjardins introduced the Desjardins Emerging Markets Equity Index ETF (DMEE-T) to offer investors who seek exposure to a broad range of mid-large cap companies in the emerging markets for portfolio diversification.
Amy Mak, is ETF Specialist at Inovestor.
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