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 05:52
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada’s ETF market is thriving with new offerings from Manulife, LongPoint, and BMO. These include active income strategies, triple-leveraged ETFs, and gold-focused funds designed to meet investor demand for tailored solutions.

MicroStrategy Products
open_in_newOriginal article

Estimated market influence

Manulife Investment Management

Positivesentiment_satisfied
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

Positivesentiment_satisfied
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 of Canada’s ETF Market Developments

Key Insights and Market Implications

1. Manulife’s Expansion into ETFs

  • Manulife Investment Management launched four new ETF series, repackaging mutual fund strategies into low-cost, intraday-traded vehicles.
  • Products:
    • MFCI: Blends government and corporate bonds across credit tiers for optimized returns.
    • MFCA: Globally diversified equity fund targeting dividend growers with strong business models.
    • MFGO: Focuses on Canadian companies for dividend growth.
    • MFGU: Provides monthly income from a mix of Canadian, U.S., and global dividend payers.
  • Fee Structure: Low-cost options for advisors and investors to build resilient, income-focused portfolios.
  • Market Impact: Manulife’s move highlights the shift toward active management and tailored solutions in Canada’s ETF market.

2. LongPoint’s Triple-Leveraged ETFs

  • LongPoint Asset Management introduced Canada’s first locally listed 3X leveraged and inverse ETFs, traded in Canadian dollars.
  • 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 ETFs: Also launched -3X inverse counterparts for short-term trading strategies.
  • Proposed Single-Stock ETFs: Filed for 2x leveraged single-stock ETFs, including COIU CN (Coinbase) and MSTU CN (MicroStrategy).
  • Fee Structure: 1.55% management fee for single-stock ETFs.
  • Market Impact: LongPoint’s innovation caters to high-risk, short-term traders seeking amplified exposure to volatile U.S. tech stocks and sectors.

3. BMO’s Actively Managed ETF Suite

  • BMO Asset Management launched a new suite of actively managed ETFs led by Brian Belski, Chief Investment Strategist.
  • Products:
    • BMO Multi-Asset Income ETF (ZWBK): Balances equities and fixed income.
    • BMO Canadian Dividend ETF (ZWCD): Focuses on Canadian dividend-paying stocks.
    • BMO U.S. Large-Cap ETF (ZWUS): Targets U.S. large-cap equities with hedged and unhedged units.
    • BMO Gold Bullion Income ETF (ZWGD): Provides exposure to gold bullion with income generation through covered call spreads.
  • Market Impact: BMO’s ETFs cater to investors seeking diversified equity exposure, currency hedging flexibility, and gold-based income strategies.

4. Market Trends and Competitive Dynamics

  • Investor Demand: Increasing preference for tailored, outcome-driven ETFs that combine active management with specific income or sectoral focus.
  • Innovation: Canadian issuers are leveraging innovation to capture market share, with a focus on leveraged products and gold strategies.
  • Competition: The launches by Manulife, LongPoint, and BMO underscore the intensifying competition in Canada’s ETF market, driven by investor demand for specialized products.
  • Regulatory Considerations: No explicit mention of regulatory changes, but the introduction of leveraged ETFs may attract scrutiny due to their high-risk nature.

5. Long-Term Effects and Industry Implications

  • Diversification of Product Offerings: The new ETFs provide investors with more tools to construct resilient portfolios tailored to their risk tolerance and investment goals.
  • Growth of Canadian ETF Market: The launches signal a maturing market with increasing sophistication in product development.
  • Impact on Advisors: The availability of low-cost, actively managed ETFs may shift advisor strategies toward more customized client portfolios.
  • Global Competitive Landscape: Canadian issuers are competing with global players, offering homegrown solutions that cater to local investor preferences.

Conclusion

Canada’s ETF market is undergoing a phase of innovation, with major issuers introducing products that cater to diverse investor needs. The launches by Manulife, LongPoint, and BMO reflect the growing demand for tailored solutions, active management, and exposure to high-growth sectors. These developments are likely to drive further competition and product innovation in the Canadian ETF space, benefiting investors seeking specialized investment opportunities.