February 1, 2019 09:30
Photo : Freepik
In 2019, the assets of the exchange traded fund (ETF) croitra at a pace even more accelerated in Canada and elsewhere in the world. The global market for ETFS is projected to double to more than 10 000 billion us dollars (billion US dollars) in 2024. The assets of the ETF canada will reach 400 billion dollars (G$) domestic by then.
With assets of 156 Billion$ in 2018, the ETF ended the year strong, and 2019 seems even more promising, according to the report Prospects of the ETF just released by BMO global asset Management.
According to the report, the global market for ETFS has reached a record high of 4 US$ 700b in assets under management at the end of 2018. There were a total of 6 483 ETFS across the world, up from 12% in 2017.
Distribution at low prices
According to BMO global asset Management, 2018 has been witness to the advent of ETFS in asset allocation, which have disrupted the sector. The manager maintains that the ETF asset allocation have been the answer to the portfolios based on the risk of cautious, balanced and growth funds common. “Investors have ETFS in their product of choice because they are tools of asset allocation efficient, low-cost,” said Kevin Gopaul, head of exchange-traded funds, BMO global asset Management.
Mr. Gopaul assigns to the return of the volatility on the global markets, this growing interest of investors in the ETF. According to him, they appreciate, among others, the effectiveness of trading of the ETFS, which allows them to gain a diversified exposure to markets in a single operation.
Confidence in the TSX
BMO global asset Management notes that investors have continued confidence in the overall exposure to canadian equities, particularly in the financial services and energy. She saw the value, given the under-performance of Canada relative to the main world markets, explains the firm.
The report mentions that the ETF BMO S&P/TSX has been the exchange-traded fund in which Canadians have invested the most in new capital by 2018. The funds collected net inflows of funds of more than$ 1 billion, on a total of 20$ in cash inflows in ETFS in Canada.
Trend in fixed income
The ETF fixed-income securities in the short-term trend. “In 2018, there has been rotation in the categories of fixed-income assets with shorter duration, and relevance to the strategies of active management of fixed income securities “, one can read in the report.
BMO global asset Management adds that investors are also turning to ETFS to provide asset classes that are difficult to access, such as fixed-income securities traded in the otc market.
ETFS also allow investors to rotate their positions in fixed-income securities. They can easily change by negotiating on the open market, to reflect the mood of the markets.
While the index funds, passively managed had made the success of the sector until now, actively managed ETFS have surfed on an awareness of the suppliers and investors towards this strategy. The report noted that, if actively managed ETFS have become essential, they will now have to prove their worth in the face of mutual funds in active management.
BMO global asset Management also believes that active and passive management are complementary strategies for the ETF. “The importance of positioning with ETFS, passively managed traditional and new ETF for active management proved to be at corrections of market occurred in the fourth quarter,” said Mr. Gopaul.