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

  • 03.06.2025 05:32
  • 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, offering active strategies, leveraged plays, and gold income funds tailored for investors seeking specialized 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 and Summary of Canada’s ETF Scene

Key Developments in the Canadian ETF Market

  • Three Major Players Launch Innovative ETFs: Manulife, LongPoint, and BMO have introduced new ETFs targeting active management, leveraged strategies, and gold exposure.

Manulife’s Active ETF Series

  • Four New ETFs Launched:
    • Fixed income and equity-focused funds.
    • Includes a bond fund blending government and corporate bonds across credit tiers for optimized returns.
    • Equity funds targeting dividend growers globally (e.g., global and Canadian-focused strategies).
    • A monthly income fund combining dividends from Canadian, U.S., and global sources.

LongPoint’s Leveraged ETF Innovations

  • First Triple-Leveraged ETFs in Canada:
    • 3X leveraged and inverse ETFs tied to indices/sectors: Canadian banks (BNKU), gold miners (CGMU), and U.S. Treasuries (TLTU).
    • Proposed 2x leveraged single-stock ETFs targeting U.S. tech names (COIU CN for Coinbase, MSTU CN for MicroStrategy*).
    • Management fee: 1.55%.

BMO’s Strategist-Led ETFs and Gold Income Strategy

  • Actively Managed ETF Suite:
    • Diversified equity and fixed income fund (BMO Multi-Asset Income ETF).
    • U.S.-focused equity ETFs with hedged and unhedged units (BMO S&P 500 Hedged ETF).
  • Gold Income Strategy:
    • ZWGD (BMO Gold Covered Call ETF): Provides exposure to gold bullion with income generation via covered call spread.
    • Designed for diversification and inflation protection.

Market Implications and Competitive Dynamics

  • Innovation in ETF Productivity: Canadian issuers are responding to investor demand for tailored, outcome-driven products.
  • Increased Competition: New offerings from Manulife, LongPoint, and BMO highlight the growing sophistication of the Canadian ETF market.
  • Focus on Specialized Strategies:
    • Manulife targets income-focused investors with active management.
    • LongPoint caters to high-risk tolerance traders with leveraged ETFs.
    • BMO emphasizes strategic equity and gold income solutions.

Long-Term Effects and Regulatory Considerations

  • Potential for Market Expansion: The introduction of specialized ETFs may drive further innovation and competition.
  • Regulatory Focus on Leveraged Products: Potential oversight to manage risks associated with leveraged ETFs.

Strategic Considerations

  • Investor Demand: Tailored products reflect a shift towards personalized investment solutions.
  • Cost Efficiency: Low-cost ETFs (e.g., Manulife’s offerings) are gaining traction.
  • Market Positioning: Each issuer is targeting distinct investor segments, from income-focused to risk-tolerant traders.

Conclusion

The Canadian ETF market is evolving with a focus on innovation, specialization, and investor-centric solutions. The launches by Manulife, LongPoint, and BMO underscore the growing sophistication of Canadian issuers in meeting diverse investor needs.