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 05:53
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada’s ETF market is seeing new products from Manulife, LongPoint, and BMO. These include active strategies, leveraged ETFs, and gold income funds targeting diverse investor needs.

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Estimated market influence

Manulife Investment Management

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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: Key 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. This shift reflects broader trends in financial product development, driven by market dynamics and investor preferences.

Manulife Investment Management

  • New ETF Series: Launched four new actively managed ETFs targeting fixed income and equity strategies.

    • Manulife Active Income ETF: Combines government and corporate bonds across credit tiers for optimized returns.
    • Global Dividend Growth ETF: Focuses on dividend-paying stocks with strong business models globally.
    • Canadian Equity Dividend ETF: Targets Canadian companies for dividend growth.
    • Monthly Income ETF: Provides monthly income from a mix of Canadian, U.S., and global dividend payers.

  • Key Implications: These funds offer low-cost, flexible tools for advisors and investors to build resilient portfolios with active management.

LongPoint Asset Management

  • Triple-Leveraged ETFs: Launched Canada’s first 3X leveraged and inverse ETFs, traded in Canadian dollars.

    • Products: Include exposure to Canadian banks (BNKU), gold miners (CGMU), and long-duration U.S. Treasuries (TLTU).
    • Inverse ETFs: Offer -3X exposure to these sectors.

  • Proposed Single-Stock Leveraged ETFs: Filed for 2x leveraged ETFs targeting U.S. tech stocks, including Coinbase (COIU) and MicroStrategy (MSTU).

    • Management Fees: 1.55% for both ETFs.

  • Market Impact: These high-risk, high-reward products cater to active traders seeking amplified exposure to volatile sectors.

BMO Asset Management

  • Strategist-Led ETFs: Introduced a suite of actively managed ETFs led by Brian Belski, Chief Investment Strategist.

    • Balanced Income ETF: Combines equities and fixed income for diversified exposure.
    • U.S.-Focused ETFs: Include the BMO S&P 500 Index ETF and others with hedged/unhedged units.

  • Gold Income Strategy: Launched the BMO Gold Bullion Income ETF (ZWGD), providing exposure to gold bullion with income through covered call spreads.

  • Key Implications: These products offer strategic positioning in U.S. and Canadian markets, with flexibility to manage currency risk.

Market Trends and Implications

  • Increased Competition: The launches by Manulife, LongPoint, and BMO highlight a competitive landscape driven by investor demand for specialized products.
  • Leveraged ETFs: High-risk, high-reward options like LongPoint’s 3X leveraged ETFs are gaining traction among active traders.
  • Gold and Income Focus: The growing interest in gold and income-generating ETFs reflects investor priorities for stability and yield.
  • Regulatory Considerations: The rise of leveraged ETFs may attract regulatory scrutiny due to their risks and complexity.

Strategic Considerations

  • Investors: Have access to more sophisticated tools for portfolio construction, but need careful consideration of risks like leverage and market volatility.
  • Advisors: Must navigate the complexities of these products, ensuring they align with client goals and risk tolerance.
  • Long-Term Effects: The trend toward specialized ETFs may reshape the Canadian market, driving further innovation and potentially altering investor behavior.

Conclusion

Canada’s ETF market is evolving rapidly, with major issuers offering innovative solutions to meet investor demands. While these products present opportunities for growth and diversification, they also require careful consideration of risks and market dynamics. The competitive landscape is heating up, with implications for both short-term trends and long-term market structure.