- In the first six months of 2020, ETF inflows in Canada reached a record $22.4 billion1
- Fixed income ETFs provide investors liquidity during market
sell-off
TORONTO, July 30, 2020 /CNW/ - BMO Global Asset Management
(BMO GAM) today released a mid-year ETF Outlook Report,
which reviews ongoing trends in the Canadian exchange traded fund
(ETF) industry.
2020: Reflections to Date
The markets shifted rapidly in response to the COVID-19 pandemic
and the resulting fiscal and monetary stimulus packages. Investors
used ETFs to navigate this volatility and transform portfolios with
an easy-to-use, single ticket solution. Driven mostly by net
inflows as the market recovery continues, the Canadian ETF industry
began the year at $205 billion and
now sits at $217
billion2.
"The benefits and advantages of ETFs were evident over the last
six months, including efficient trading, diversified portfolios,
and transparency so that investors knew whether or not they
were buying into companies that were driving the recovery," said
Mark Raes, Head of Product, BMO
Global Asset Management Canada. "Investors were able to use ETFs to
navigate market turmoil and effectively manage portfolios. We can't
overstate the importance of ETF liquidity when investors need
it."
Key Trends
Fixed Income: This ETF asset class continued to trade and
provide liquidity during the recent downturn in the fixed income
markets, particularly corporate bonds.
Equities: Investors sought broad market exposures as they
traded into equities at attractive valuations during the sell-off
hoping to capture growth during the recovery.
Factor Rotation: The Quality Factor has outperformed, as
the stressed market environment has highlighted the resilience of
high quality companies with low debt, stable cash flows and high
return on equity.
ESG: Investors turned to companies with strong governance
during the recent market collapse – demonstrating an
increasing awareness of the impact strong corporate governance has
on a company's resilience under stress.
"With markets shifting faster and more dramatically than many
expected, ETFs have clearly delivered, both by flows and by trading
liquidity," said Mr. Raes. "We expect the record volumes of the
first half of 2020 to be an indicator, not an anomaly, of future
ETF acceptance."
To view the full report, please click here. For more information
on BMO ETFs, visit: www.bmo.com/etfs.
1
National Bank, June 30, 2020
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2BMO
Global Asset Management, June 30, 2020
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BMO Global Asset Management is a brand name that comprises BMO
Asset Management Inc., BMO Investments Inc., BMO Asset Management
Corp., BMO Asset Management Limited and BMO's specialized
investment management firms.
BMO ETFs are managed by BMO Asset Management Inc., which is an
investment fund manager and a portfolio manager, and a separate
legal entity from Bank of Montreal.
About BMO Exchange Traded Funds (ETFs)
BMO Exchange
Traded Funds has been a leading ETF provider in Canada for 11 years, with 96 mandates and 30
per cent market share in Canada. BMO ETFs are designed to stay
ahead of market trends and provide compelling solutions to help
advisors and investors. This includes a comprehensive
suite of ETFs developed in Canada for Canadians, such as
cost effective core equity ETFs following market leading indexes,
and a broad range of fixed income ETFs; solution-based
ETFs responding to client demand; and innovation with smart beta
ETFs, as well as combining active and passive investing with ETF
series of award-winning active mutual funds.
About BMO Financial Group
Serving customers for 200
years and counting, BMO is a highly diversified financial services
provider - the 8th largest bank, by assets, in North America.
With total assets of $987 billion as of April 30,
2020, and a team of diverse and highly engaged employees, BMO
provides a broad range of personal and commercial banking, wealth
management and investment banking products and services to more
than 12 million customers and conducts business through three
operating groups: Personal and Commercial Banking, BMO Wealth
Management and BMO Capital Markets.
Internet: www.bmo.com Twitter:
@BMOMedia
SOURCE BMO Financial Group