Oh, Canada: As In U.S., ETFs Defying Mutual Funds
Source: http://www.indexuniverse.com/sections/newsinfocus/4789-oh-canada-as-in-us-etfs-defying-mutual-funds.html?Itemid=3&utm_source=straightstocks.com&utm_medium=sidebar&utm_campaign=rssPosted on Thursday, November 6th, 2008 | In Exchange Traded Funds
Through the third quarter, the Canadian ETF market had the eighth-most ETF listings worldwide and more than $16 billion in assets.
Recent asset flows into Canadian exchange-traded funds have defied the larger trend of investors bailing out of Canadian mutual funds, mirroring the situation in the U.S.
Canadian mutual funds are experiencing record outflows. But at the same time, the world’s biggest ETF manager, Barclays Global Investors, is experiencing record inflows into its Canadian ETFs, according to BGI and the Investment Funds Institute of Canada.
In the past two months combined, Canadian iShares had net inflows of C$2.1 billion. Canadian mutual funds took it on the chin during the same time period, losing C$4.5 billion in September and C$8.45 billion in October, according to the IFI, an industry trade group.
A similar divergence between traditional fund assets and ETF asset flows has been registered in the U.S. (See story here.)
Canadian iShares inflows have been concentrated in the iShares CDN LargeCap 60 Index Fund (XIU), with inflows of $1.38 billion, and iShares CDN S&P 500 Index Fund (XSP), with inflows of $204 million, according to BGI.
Canadian iShares have also benefited in the areas of Energy and Fixed Income. The iShares CDN Energy Sector Index Fund (XEG) had inflows of $130 million, while the Canadian iShares fixed-income funds saw $125 million in new assets during the past two months. This provides a slight contrast to recent U.S. ETF flow patterns. In October, only equity ETFs had net inflows in the U.S., with the commodities and fixed-income ETF categories both suffering net outflows, according to National Stock Exchange data.
Maybe of more importance in terms of judging success of ETFs in Canada and in the U.S., one of the Canadian iShares, XIU, was the most heavily traded security on the Toronto Stock Exchange during October, with $8.3 billion in total trading volume, says BGI.
ETFs not only represented 38% of all equities trading in the U.S. in October, but it is common now for some big ETFS—PowerShares QQQ (Nasdaq: QQQQ) and the SPDRs (AMEX: SPY), for example—to be among the most active daily stocks.
Through the end of the third quarter, the Canadian ETF market had the eighth-most ETF listings worldwide (73), and a little more than $16 billion in assets, according to BGI’s ETF research implementation strategy group.
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