Bringing you live news and features since 2006 

ETFs are key tool for navigating market volatility

RELATED TOPICS​

BMO Global Asset Management (BMO GAM) has released its ETF Outlook Report for 2016 looking at key trends that contributed to the growth of the Exchange Traded Fund (ETF) market in 2015 and opportunities and challenges for the year ahead.

According to the report, 2015 was an historic year for the Canadian ETF industry with more than CAD16.3 billion in inflows. Assets under management (AUM) reached just under CAD90 billion – double the AUM of the industry five years ago.
 
The report noted that in Canada, equity ETFs accumulated CAD9.7 billion in inflows and fixed income ETFs added CAD6 billion in inflows. BMO GAM's ETF business led the Canadian ETF industry in net assets for the fifth consecutive year.
 
"2015 was a record-breaking year for the domestic ETF industry," says Kevin Gopaul, Senior Vice President and Chief Investment Officer, BMO Global Asset Management. "This is particularly impressive given the turbulent markets we experienced. It's clear that investors continue to gravitate towards ETFs, both as core holdings and to position their portfolios strategically to address these periods of volatility."
 
The report also examined how ETFs are used to address market volatility as a key theme of 2015.
Advances in Smart Beta ETFs: Smart beta ETFs continue to grow in popularity, as they aid investors to navigate market turbulence. Low volatility ETFs invest in equity markets but with less exposure to market volatility. Multi-factor smart beta ETFs are new to the market, giving more choice to investors.
Fixed Income: Market volatility also impacts fixed income portfolios. Economic news can have divergent impacts-on short-term rates based on current conditions and on long-term rates based on future expectations. The ETF industry has evolved to offer precise portfolios, slicing the credit spectrum and segmenting by maturity.
 
Currency Effect: Another factor affecting portfolios has been the impact of currency returns. Canadian investors often prefer a hedged exposure; ETFs are now offering both hedged and unhedged listings.
The report concludes by noting that ETFs continue to grow in popularity, through smart beta and currency options, and will be a powerful tool to help reposition portfolios and to manoeuvre turbulent markets.
 
"We expect to see the ETF industry continue to grow in the years ahead. We project that by 2021, the global ETF market will double to more than USD6 trillion and the Canadian industry will grow even faster to reach CAD250 billion," says Gopaul.

Latest News

Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..
Confidence in the continuing strength of bitcoin and Ethereum is driving wider interest in altcoins and other digital assets, according..

Related Articles

Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Cryptocurrencies
Matteo Greco, Research Analyst at Fineqia International writes that bitcoin (BTC) ended the week at approximately USD52,150, showing a notable...
US Distribution Awards trophies
The winners of the first US ETF Distribution Awards at the Exchange conference, hosted by ETF Express and sponsored by...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by