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 21:11
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada's ETF market is innovating with new products from Manulife, LongPoint, and BMO. These include active income funds, leveraged ETFs, and gold strategies offering tailored solutions for investors seeking specific outcomes.

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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

  • Date: June 2, 2023
  • Key Players: Manulife, LongPoint, and BMO Asset Management
  • Focus Areas: Active management, leveraged strategies, gold exposure

Manulife’s Launch: Active ETF Series

  • Products: Four new ETFs targeting fixed income and equity strategies.

    • Manulife Active Income ETF: Blends government and corporate bonds across credit tiers.
    • Global Dividend Equity ETF: Targets dividend growers globally.
    • Canadian Dividend Equity ETF: Focuses on Canadian companies.
    • Global Monthly Income ETF: Provides monthly income from a mix of dividends.

  • Key Insight: Low-cost, intraday-traded vehicles offering flexibility and active management.

LongPoint’s Innovations: Triple-Leveraged ETFs

  • Products: Canada’s first 3X leveraged and inverse ETFs.

    • BNKU: 3X exposure to Canadian banks.
    • CGMU: 3X exposure to Canadian gold miners.
    • TLTU: 3X exposure to long-duration U.S. Treasuries.
    • Inverse counterparts offering -3X exposure.

  • Proposed Expansion: 2x leveraged single-stock ETFs targeting U.S. tech names (e.g., Coinbase and MicroStrategy).

    • Management Fee: 1.55%.

  • Key Insight: High-volatility U.S. tech exposure with amplified returns, appealing to traders.

BMO’s Strategy: Actively Managed ETFs

  • Products: New suite of actively managed ETFs led by Brian Belski.

    • BMO Diversified Equity and Fixed Income ETF: Balances Canadian and U.S. exposure.
    • BMO U.S.-Focused ETFs: Include growth, value, and dividend-focused strategies.
    • ZWGD (BMO Gold Income ETF): Provides gold bullion exposure with covered call income.

  • Key Insight: Diversified equity and fixed-income options, plus a gold-focused product for inflation protection.

Market Trends and Implications

  • Increased Competition: issuers are innovating to meet investor demand for tailored, outcome-driven products.
  • Shift Toward Active Management: Traditional passive ETFs are being complemented by actively managed options.
  • Leveraged Products Growth: High-risk, high-reward ETFs are gaining traction among traders.
  • Gold and Alternative Assets: Investors seeking diversification and inflation protection are driving demand for gold-related ETFs.

Competitive Dynamics

  • Manulife: Focus on low-cost, active management for income-focused investors.
  • LongPoint: Pioneering leveraged ETFs, targeting high-volatility U.S. tech and sectors like banks and gold miners.
  • BMO: Leveraging strategic insights to offer diversified, hedged, and unhedged options.

Strategic Considerations

  • Investor Demand: Tailored solutions for income, growth, and alternative assets.
  • Regulatory Compliance: issuers must navigate regulations for leveraged and inverse ETFs.

Long-Term Effects

  • Market Share: Potential shifts as new products attract different investor segments.
  • Product Differentiation: issuers may focus on niche markets to stand out in a crowded ETF landscape.

Regulatory Impact

  • Oversight of Leveraged Products: Regulators may increase scrutiny on high-risk ETFs.
  • Alternative Investment Products: Growing interest in gold and alternative assets may prompt regulatory changes.

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