Canada’s ETF Scene Heats Up: Active, Leveraged, and Gold Strategies Make Waves

Canada’s ETF Scene Heats Up: Active, Leveraged, and Gold Strategies Make Waves

  • 02.06.2025 11:45
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada’s ETF scene is heating up with new products from Manulife, LongPoint, and BMO. These include active income funds, leveraged ETFs, gold strategies, and tech-focused investments.

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Estimated market influence

Manulife Investment Management

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Analyst rating: N/A

rolled out four new ETF series targeting fixed income and equity with active management focus on income and quality growth

LongPoint Asset Management

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Analyst rating: N/A

launched Canada’s first locally listed 3X leveraged and inverse ETFs, including single-stock plays

BMO Asset Management

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Analyst rating: N/A

introduced a new suite of actively managed ETFs shaped by the insights of Brian Belski, Chief Investment Strategist at BMO Capital Markets

Context

Analysis of Canada’s ETF Scene: Key Insights and Market Implications

Overview

  • Canada’s ETF market is experiencing significant innovation, with major players introducing specialized products to meet investor demand for tailored solutions.
  • The focus is on active management, leveraged strategies, and gold exposure, reflecting evolving market trends and investor preferences.

Manulife Investment Management

  • New ETF Series: Launched four new ETFs targeting fixed income and equity strategies.
    • Manulife Active Income ETF: Combines government and corporate bonds across credit tiers for optimized returns.
    • Global Dividend Growth ETF: Targets dividend growers with strong business models globally.
    • Canadian Dividend Growth ETF: Focuses on Canadian companies for income generation.
    • Global Monthly Income ETF: Provides monthly income from a mix of Canadian, U.S., and global dividend payers.
  • Key Features:
    • Low-cost, intraday-traded vehicles.
    • Emphasizes active management and income-focused strategies.

LongPoint Asset Management

  • Triple-Leveraged ETFs: Launched Canada’s first 3X leveraged and inverse ETFs, traded in Canadian dollars.
    • Examples include:
      • LongPoint Canadian Banks 3X Leveraged ETF (_BNKU)
      • LongPoint Canadian Gold Miners 3X Leveraged ETF (_CGMU)
      • LongPoint U.S. Long Treasuries 3X Leveraged ETF (_TLTU)
      • Inverse counterparts for short positions.
  • Proposed Single-Stock ETFs:
    • LongPoint Coinbase 2X Leveraged ETF (_COIU CN)
    • LongPoint MicroStrategy 2X Leveraged ETF (_MSTU CN)
    • Fees: 1.55% management fee.
    • Targeted at traders seeking amplified exposure to high-volatility U.S. tech stocks.

BMO Asset Management

  • Actively Managed ETFs:
    • Introduced a suite of ETFs led by Brian Belski, Chief Investment Strategist.
    • Options include:
      • BMO Diversified Equity ETF
      • BMO Canadian Balanced ETF
      • U.S.-focused ETFs with hedged and unhedged units for currency risk management.
  • Gold Income Strategy:
    • Launched BMO Gold Bullion Covered Call ETF (_ZWGD).
    • Provides exposure to long-term gold bullion holdings while generating income through a covered call spread.
    • Designed for diversification and inflation protection.

Market Trends and Implications

  • Increased Competition: The launches by Manulife, LongPoint, and BMO highlight heightened competition in the Canadian ETF space.
  • Leveraged Products: The introduction of 3X and 2X leveraged ETFs caters to high-risk tolerance investors seeking amplified returns, particularly in volatile sectors like tech and gold mining.
  • Gold as a Hedge: The growing interest in gold ETFs underscores investor focus on inflation protection and portfolio diversification.
  • Active Management Resurgence: The shift from passive to active management strategies reflects investor demand for tailored, outcome-driven solutions.
  • Regulatory Considerations: The launch of leveraged ETFs may attract regulatory scrutiny, particularly regarding investor suitability and risk disclosure.

Strategic Considerations

  • Investor Demand: The focus on income generation, leveraged exposure, and gold highlights evolving investor priorities in a low-rate environment.
  • Innovation: Canadian issuers are leveraging homegrown solutions to compete with global players, enhancing their market share.
  • Long-Term Effects: The proliferation of leveraged ETFs may lead to increased market volatility, while gold-focused products could see sustained demand amid inflation concerns.

Conclusion

Canada’s ETF market is undergoing a transformation, with innovative products catering to diverse investor needs. The launches by Manulife, LongPoint, and BMO signal a shift toward specialized, outcome-driven strategies, with implications for competition, market dynamics, and investor behavior.