- Flows reached $17 billion over the first half of the year in Canada1
- Inflation poses a major risk, tech is under pressure, and few places to hide for fixed income investors
- BMO's Equal Weight Banks ETF among the top 10 in terms of flows1
TORONTO, July 26, 2022 /CNW/ - BMO Global Asset Management (BMO GAM) today released its mid-year Exchange Traded Funds (ETF) report highlighting the continued popularity and growth of ETFs in Canada. The report features experts from across BMO GAM's ETF team sharing insights on the Canadian ETF market, and ETF trends in volatile markets.
"Investors have had a rough ride with markets this year," said Mark Raes, Head of Product, BMO Global Asset Management Canada. "ETFs continue to prove their worth both strategically and tactically as access vehicles for satellite positions and as core building blocks in portfolios. Even amid heightened inflation, ETFs that focus on specific areas of the market such as infrastructure can provide a good hedge and offer protection for investors."
Inflation: Alfred Lee (Portfolio Manager)
- With aggressive assumptions for further rate hikes already priced in, leveling inflation would be the catalyst to turn the markets around.
- ETFs with exposure to certain sectors, such as financials and infrastructure can offer investors a hedge against inflation.
Growth and Innovation: Mark Raes (Head of Product)
- The rise of inflation has hit growth stocks hard, as companies valued on future cash flows now face a higher discount rate and lower growth estimates.
- Long-term, these ETFs will continue to influence our behaviours and routines and have the potential to power equity markets in the future.
Environmental, Social and Governance (ESG): Erin Allen (VP, Online ETF Distribution)
- Despite uncertain markets, geopolitical events, and the pandemic, ESG ETFs continue to attract investors, led by institutional flows.
- BMO's suite of ESG Leaders ETFs targets a sector neutral exposure, which helps, under normal circumstances, to keep performance in line with the broad market.
Sectors: Chris McHaney (Portfolio Manager)
- Canadian energy sector ETFs saw inflows of $730 million year to date.1
- BMO's Equal Weight Banks ETF was in the top 10 in terms of flows.1
- Utilities showed positive performance year to date with the defensive sector having ties to the energy complex, and high levels of current cash flow.
Dividend and Low Volatility: Chris Heakes (Portfolio Manager)
- A shift from growth factors to defensive factors as a result of the market volatility.
- Investors used ETFs to add strategic portfolio positions to capitalize on this market rotation: dividend ETFs saw $1.3 billion in net new flows year to date.1
Fixed Income: Matt Montemurro (Portfolio Manager)
- A challenging first half for fixed income where the combination of the negative drag on performance from interest rate sensitivity and the widening of credit spreads has left investors very few places to hide.
To view the full report, please click here.
For more information on BMO ETFs, visit: www.bmo.com/etfs.
BMO Exchange Traded Funds has been a leading ETF provider in Canada for more than 11 years, with over 100 strategies, over 25 per cent market share in Canada2, and $80.6 billion in assets under management. 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 active mutual funds.
National Bank, ETF Report, June 30, 2022
Morningstar, May 2022
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 $1.04 trillion as of April 30, 2022, 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.
Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus of the BMO ETFs before investing. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated.
For a summary of the risks of an investment in the BMO ETFs, please see the specific risks set out in the BMO ETF's prospectus. BMO ETFs trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination.
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.
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SOURCE BMO Financial Group