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Canadians “turn to ETFs in economic downturn”


The volatility and downturn in the current market has paved the way for an historic shift in Canada’s investment landscape, according to Barclays Global Investors.

The volatility and downturn in the current market has paved the way for an historic shift in Canada’s investment landscape, according to Barclays Global Investors.

It says that for the first time ever Canadians invested more dollars in iShares exchange traded funds in 2008 than in all mutual fund providers.

According to available financial data, Barclays Global Investors Canada’s iShares funds were number one in net new long term assets in 2008, surpassing all leading mutual fund providers.

BGI says CAD4.4bn was invested into iShares, nearly double the CAD2.4bn invested into Dynamic Funds – the second largest in terms of net new long term assets.

"This trend signals a complete shift in the mind set of today’s investor and investment advisor," says Heather Pelant, head of iShares, BGI Canada. "In a year that saw investors cashing out in droves – one place they were willing to invest was in our iShares Funds.

‘What we’re seeing emerge from this historic period is a wiser, more informed investor who is considering risk and cost along with return, asking more questions, looking for more transparency to understand what they own and seeking a new way to build and consider their portfolio."

BGI claims that iShares ETFs also ranked number two in overall net new assets, second only to RBC at CAD6.9bn.

iShares funds now represent more than five per cent of all equity trading on the TSX (5.3 per cent in 2008).

Earl Bederman, president of Investor Economics, says: "The rapid growth in assets reflects a confluence of factors that have captured the attention of investors and portfolio managers across the Canadian investment landscape.

"Along with individual investors, what we’re seeing is mounting evidence that a growing segment of advisors and wealth managers have embraced the appeal of ETFs by utilizing them as building blocks of investment solutions offered to clients."

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