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 20:42
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada’s ETF market is heating up with new products from Manulife, LongPoint, and BMO. These include active management strategies, leveraged ETFs, gold exposure, and innovative income-focused funds tailored to investor demand.

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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 Market Developments

Key Insights and Market Implications

1. Manulife’s Active ETF Launch

  • Manulife Investment Management introduced four new ETF series, repackaging mutual fund strategies into low-cost, intraday-traded vehicles.
  • Focus Areas: Fixed income and equity strategies targeting income and quality growth.
    • Key Products:
      • A fixed-income ETF blending government and corporate bonds across credit tiers.
      • Equity funds targeting dividend growers (global and Canadian).
      • A monthly income ETF from Canadian, U.S., and global dividend payers.
  • Impact: Provides advisors and investors with new tools for constructing resilient, income-focused portfolios.

2. LongPoint’s Leveraged ETF Innovation

  • LongPoint Asset Management launched Canada’s first 3X leveraged and inverse ETFs, traded in Canadian dollars.
  • Focus Areas: Amplified exposure to major indices and sectors, including:
    • Canadian banks (BNKU)
    • Canadian gold miners (CGMU)
    • Long-duration U.S. Treasuries (TLTU)
  • Inverse ETFs: Include -3X counterparts for shorting these sectors.
  • Future Plans: Filed for 2x leveraged single-stock ETFs targeting U.S. tech names like Coinbase (COIU CN) and MicroStrategy (MSTU CN).
  • Fees: 1.55% management fee for single-stock ETFs.
  • Impact: Sets a new benchmark for high-volatility trading in Canada, attracting speculative investors.

3. BMO’s Strategist-Led ETFs and Gold Strategy

  • BMO Asset Management introduced a suite of actively managed ETFs led by Brian Belski, Chief Investment Strategist.
  • Focus Areas: Diversified equity and fixed income exposure across Canadian and U.S. markets, with hedged and unhedged units for currency risk management.
  • Gold Income Strategy: Launched ZWGD, a gold bullion ETF with covered call spread income generation.
  • Impact: Enhances BMO’s position in the ETF market with a unique gold income product, appealing to investors seeking diversification and inflation protection.

4. Market Trends and Competitive Dynamics

  • Innovation: Canadian issuers are responding to investor demand for tailored, outcome-driven products.
  • Competition: The launches by Manulife, LongPoint, and BMO highlight a shift toward specialization in ETF offerings.
  • Investor Demand: Focus on income, leverage, and gold reflects current market trends, including rate sensitivity and inflation concerns.

5. Long-Term Effects and Industry Implications

  • Increased Product Variety: The introduction of active, leveraged, and gold-focused ETFs expands investor options.
  • Potential for Higher Fees: Leveraged ETFs may attract speculative traders, potentially driving higher trading volumes.
  • Regulatory Considerations: While not directly addressed in the article, leveraged ETFs may face regulatory scrutiny due to their risk profiles.

6. Strategic Considerations

  • Advisory Impact: The new ETFs provide financial advisors with more tools to build customized portfolios.
  • Investor Education: High-risk products like leveraged ETFs require clear communication of risks to investors.

Conclusion

Canada’s ETF market is undergoing a phase of innovation, with major players offering specialized products to meet evolving investor demands. The launches by Manulife, LongPoint, and BMO underscore a competitive landscape driven by product differentiation and market trends. These developments are likely to shape the future of Canadian ETF investing, offering both opportunities and risks for investors.