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Ron Landry, CIBC Mellon
Ron Landry, CIBC Mellon

Strength keeps CIBC Mellon ahead

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CIBC Mellon | Best ETF Custodian in Canada | Best ETF Back Office Tech Provider in Canada | Best Overall ETF Administrator in Canada

Ronald C. Landry, Vice President, Head of Asset Manager and ETF Solutions, CIBC Mellon answers the questions.

Why do you think you won this award?

CIBC Mellon has a strong history as an ETF services and investment operations provider here in Canada. We have consistently provided asset servicing capabilities to ETF providers since 2009. This award is a testament to our ability to adapt to the ever shifting and innovative nature of the ETF market here in Canada. As a market leader in our space, we know the value of cutting-edge technology and the importance of client service. When our clients approach us to launch a new product, we’ve always adapted to meet those demands. Investors seek funds that meet the highest standards for resilience, timeliness and conviction, and we continue to assist our clients in building for future growth by offering market-leading platform and capabilities.

CIBC Mellon provides a wide range of ETF product types, including equity, fixed income, derivative-based products and hard commodity and currency funds. Over the past decade, our organisation has achieved numerous milestones in the ETF space. We were the first service provider to join Canadian ETF Association (CETFA) and are the only service provider represented on CETFA’s board of directors. Additionally, we were also the first service provider to the following ETF categories: cannabis, cryptocurrency, psychedelic, actively managed, high interest savings account, multi-class and ETF series.

What is the size and scale of your business at the moment?

Our business has experienced significant growth in terms of both size and scale since entering the space. With a robust infrastructure and dedicated ETF service teams across our business units, we can cater to a wide range of clients and products to handle a substantial volume of transactions efficiently.

As a leading provider of integrated services for ETF providers, we deliver local market expertise, access to global resources and advanced technology developed to meet the evolving servicing needs of ETF sponsors in Canada.

What trends have you seen over the past year?

As a vanguard for the ETF market, Canada’s unique blend of high governance and high innovation makes it an excellent market for new structures and ideas that also require a trust premium. Canadian ETFs have brought in CAD42.5 billion in 2023, with equity ETFs accounting for CAD16 billion. Higher yielding products that have a shorter duration, such as high interest saving accounts or money markets products, have been at the forefront from a trend perspective, with CAD9.9 billion in flows in 2023.

What plans do you have for growing your business over the coming year?

At CIBC Mellon, we anticipate continued growth in the active ETF space, particularly in ESG, alternatives, ETF series, high-yield products, and the money market and covered call space. In 2023, we witnessed the launch of over 105 active ETFs compared to only 42 passive ETFs, and we foresee 2024 as another robust year for high-interest savings ETFs, marking the third consecutive year of positive growth. We also expect to see sustained growth in the covered call space for the second year.

As an active participant in the industry, CIBC Mellon has been involved in key initiatives such as T+1 settlement cycles and submissions to allow collateral on ETF creation. We are engaged in the Total Cost Reporting Canadian Securities Administrators (CSA) implementation working group and have made formal submissions to local regulators to advance Canada’s regulatory environment. Our efforts aim to promote a level playing field and forward-looking regulations that facilitate future innovation, including enabling investors to access cryptocurrency and digital asset offerings through regulated instruments

Where do you see the ETF industry going in terms of products over the coming year?

As we look ahead to next year, the ETF industry in Canada is poised for continued growth and forward-thinking solutions. With the increasing popularity of ETFs as investment vehicles, we anticipate several key trends and developments.

With increasing interest rates there has been a real desire for high interest saving accounts, money market products have also been a leader from a flow perspective. Another area we’ve seen is covered call type products that have been launched.

We expect to see an expansion in thematic ETFs. These funds focus on specific sectors, themes or investment strategies and allow investors to align their portfolios with their interests or capitalise on emerging trends. As ESG has been a driver in the space, we anticipate continued growth in thematic ETFs that target sustainable sectors or companies with strong appetite for ESG practices. 

To read the rest of the report please click here.

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