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 20:24
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada’s ETF market is evolving with new offerings from Manulife, LongPoint, and BMO. These include active income funds, leveraged ETFs, and gold strategies, catering to investors seeking tailored 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

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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: Business 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.
  • Key trends include active management, leveraged strategies, and gold-focused ETFs.

Manulife Investment Management

  • New ETF Series: Launched four new ETFs targeting fixed income and equity strategies.
    • Focus: Low-cost, intraday-traded funds with active management.
    • Products:
      • Fixed income ETF blending government and corporate bonds.
      • Global equity fund targeting dividend growers.
      • Canadian-focused equity fund.
      • Monthly income ETF combining dividends from Canada, U.S., and global markets.

LongPoint Asset Management

  • Triple-Leveraged ETFs: Launched Canada’s first 3X leveraged and inverse ETFs.
    • Products:
      • BNKU: 3X leveraged exposure to Canadian banks.
      • CGMU: 3X leveraged exposure to Canadian gold miners.
      • TLTU: 3X leveraged exposure to long-duration U.S. Treasuries.
      • Inverse counterparts offering -3X exposure.
  • Proposed Single-Stock ETFs: Filed for 2x leveraged single-stock ETFs.
    • Products:
      • COIU CN: 2x daily performance of Coinbase stock.
      • MSTU CN: 2x daily performance of MicroStrategy stock.
    • Management Fees: 1.55% for both ETFs.

BMO Asset Management

  • Actively Managed ETFs: Introduced a suite of funds led by Brian Belski, Chief Investment Strategist.
    • Products:
      • Diversified equity and fixed income ETFs with hedged and unhedged units.
      • U.S. equity-focused ETFs with strategic positioning.
  • Gold Income Strategy: Launched ZWGD, a gold bullion ETF with covered call income.
    • Features: Provides exposure to long-term gold holdings and generates income through covered calls.

Market Trends and Implications

  • Increased Competition: Major issuers are innovating to capture market share.
  • Leveraged ETFs: High-risk, high-reward products catering to active traders.
  • Gold and Income Focus: Growing interest in gold as a hedge against inflation and market volatility.
  • Cost Efficiency: Low-cost ETFs are gaining traction as investors seek value.

Competitive Dynamics

  • Active vs. Passive: A shift toward actively managed ETFs as investors seek tailored outcomes.
  • Leverage and Risk: Leveraged ETFs appeal to speculative traders but carry higher risks.
  • Gold as a Strategic Asset: Gold-focused ETFs are becoming key tools for diversification.

Strategic Considerations

  • Investor Demand: Tailored, outcome-driven products are driving innovation.
  • Regulatory Environment: Potential scrutiny of leveraged ETFs due to their risk profiles.

Long-Term Effects

  • Market Expansion: Likely growth in specialized ETF offerings.
  • Investor Education: Need for greater awareness of risks associated with leveraged and complex ETFs.

Conclusion

Canada’s ETF market is evolving rapidly, with issuers offering innovative solutions to meet investor needs. While opportunities abound, the risks associated with leveraged and gold-focused ETFs require careful consideration.