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 15:23
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada's ETF market is thriving with innovative products from Manulife, LongPoint, and BMO. These include active strategies, leveraged ETFs, and gold income funds tailored to meet investor demand for specialized, outcome-driven solutions.

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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, offering amplified exposure to major indices and sectors

BMO Asset Management

Positivesentiment_satisfied
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 and Summary of Canada’s ETF Scene

Overview

  • Key Players: Manulife, LongPoint, and BMO have introduced new ETFs targeting active management, leverage, and gold strategies.
  • Market Trend: Canadian issuers are responding to investor demand for tailored, outcome-driven products.

Manulife's Launch

  • New ETF Series: Four new ETFs offering low-cost, intraday trading.
    • Focus: Fixed income and equity strategies.
    • MUSA: Blends government and corporate bonds across credit tiers for optimized returns.
    • MUBD: Globally diversified equity fund targeting dividend growers.
    • MUCA: Canadian-focused dividend strategy.
    • MUCI: Monthly income from a mix of Canadian, U.S., and global dividend payers.

LongPoint's Innovations

  • Triple-Leveraged ETFs: Canada’s first 3X leveraged and inverse ETFs.
    • Tickers: BNKU (Canadian banks), CGMU (gold miners), TLTU (long-duration U.S. Treasuries).
    • Inverse ETFs: Available for short-term trading.
  • Proposed Single-Stock ETFs:
    • COIU CN: Targets Coinbase stock with 2x daily performance.
    • MSTU CN: Targets MicroStrategy.
    • Management Fee: 1.55%.

BMO's Strategies

  • Actively Managed ETFs: Led by Brian Belski, offering diversified equity and fixed income exposure.
    • HEDJ: Balances domestic stocks with a U.S. tilt.
    • USAG: Pure U.S. equity exposure.
    • USDF: Diversified U.S. and Canadian equities with fixed income.
  • Gold Income ETF: ZWGD provides exposure to gold bullion and generates income via covered call spread.

Market Trends and Implications

  • Competition: Issuers are expanding product lines to attract diverse investor needs.
  • Leveraged ETFs: High-risk, high-reward options for traders, potentially increasing market volatility.
  • Gold and Income Strategies: Reflect investor focus on diversification and inflation protection.
  • Regulatory Considerations: Potential scrutiny of leveraged ETFs to ensure investor suitability.

Competitive Dynamics

  • Manulife: Strengthens position in active management with low-cost ETFs.
  • LongPoint: Pioneers leveraged ETFs, targeting retail and institutional traders.
  • BMO: Leverages strategic insights to offer diversified portfolios.

Strategic Considerations

  • Investor Demand: Shift toward tailored, outcome-driven products.
  • Risk Management: Leveraged ETFs require careful consideration of holding periods and market conditions.

Long-Term Effects

  • Product Innovation: Likely to drive further ETF launches, increasing market competition.
  • Investor Education: Need for clearer communication on risks associated with leveraged and inverse ETFs.

This analysis highlights the dynamic evolution of Canada’s ETF market, driven by innovation and investor demand for specialized solutions.