Canada's ETF market is growing and the shift from mutual funds may accelerate

The latest IFIC data shows that net sales for ETFs in $5.5 billion in September compared to just $790 million for mutual funds. Mutual fund assets are far higher of course at almost $2.9 trillion compared to $479 billion for ETFs.

New ETF launches favour active management with the report showing that a record high of 71% of new funds in 2024 are actively managed and 30% of total industry flows have gone to active ETFs.

While the largest Canadian ETF providers have a larger share of ETF assets in passive strategies, this changes for smaller providers with BMO having 30% of its ETF assets in active management. Bloomberg Intelligence expects larger ETF providers to increase their active lineups.

Looking at the types of Canada’s active ETFs, 53% are equity, 36% fixed income, 21% income/derivatives based, and 6% are mixed allocation.