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Graham MacKenzie, Toronto Stock Exchange
Graham MacKenzie, Toronto Stock Exchange

TMX Group celebrates increased ETF flows and that VettaFi purchase

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The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded Products, Toronto Stock Exchange, an exchange that has seen the ETF business for longer than anyone else, since the launch of that first product in 1990.

“We have also seen many new innovative products coming out of Canada partly because the entire ecosystem has been doing it for longer than anyone else,” MacKenzie says. “We are fortunate to have sophisticated and experienced  ETF stakeholders, from providers to market makers, that help to bring  out not only novel products but ones that fit the needs of Canadian investors.”

Last year saw some CAD38 billion going into net new flows in ETFs and Canada has seen CAD57 billion in mutual fund redemptions. “We have a CAD95 billion delta between ETF flows and mutual fund flows,” MacKenzie says. “Assets still grew in mutual funds and in ETFs, so both are still successful due to the market conditions, but it is clearly evident that new money chooses ETFs for the familiar benefits.”

Canada has also been going through a process of changing how financial advisers are recompensed with advisers moving to a fee-based structure, which encourages growth in ETFs.

“What is unique in Canada is that ETFs are governed by the same rule set as mutual funds so what can go into a mutual fund, can also go into an ETF.”

This means that Canada has been first with bond ETFs, spot crypto products in ETFs, cannabis, ETFs as a share class and a semi-transparent offering.

“The view on cryptocurrencies is no different here than anywhere else in the world and there is a whole realm of perspectives on them,” MacKenzie says.  “One ETF provider      includes them as an asset class in their single ticket portfolio ETFs along with fixed income and equities.”

Toronto Stock Exchange recently completed its acquisition of VettaFi, the ETF platform that runs the Exchange conference and offers index and data solutions.

VettaFi sold to TMX Group

“As a Canadian company, we are limited to the Canadian market and VettaFi gives us the chance to participate on the global runway of ETFs. It also offers us the ability to distribute content,” he says. VettaFi closed the recent Miami Exchange event with the announcement that the conference in 2025 will be held in Las Vegas.

“The key for us is growing and nurturing ETFs and the Canadian industry,” MacKenzie says. “We want to grow adoption to more people to utilise ETFs in their portfolios.”

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