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 06:20
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada’s ETF market is seeing new products from Manulife, LongPoint, and BMO, including active strategies, leveraged ETFs, and gold income funds.

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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

Overview

Canada’s ETF market is experiencing significant innovation, with major issuers introducing specialized products to meet investor demand for tailored strategies. Key trends include the rise of active management, leveraged ETFs, and gold-focused solutions.

Manulife’s Active ETF Series

  • Four new ETFs launched:
    • MFCI: Blends government and corporate bonds across credit tiers for optimized returns.
    • MFCA: Globally diversified equity fund targeting dividend growers with strong business models.
    • MFGD: Focuses on Canadian companies for dividend growth.
    • MFGU: Provides monthly income from a mix of Canadian, U.S., and global dividend payers.
  • Focus: Low-cost, intraday-traded vehicles offering active management and income-focused strategies.

LongPoint’s Leveraged ETFs

  • First triple-leveraged ETFs in Canada:
    • 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: -3X leveraged counterparts for short-term trading strategies.
  • Proposed single-stock ETFs:
    • COIU CN: 2X leveraged exposure to Coinbase stock.
    • MSTU CN: 2X leveraged exposure to MicroStrategy.
  • Fees: 1.55% management fee for both products.

BMO’s Strategist-Led ETFs

  • New actively managed ETF suite: Developed with insights from Brian Belski, BMO’s Chief Investment Strategist.
    • HEDJ: Diversified blend of equities and fixed income.
    • USAG and USAF: U.S.-focused equity ETFs with hedged and unhedged units.
  • Gold income strategy:
    • ZWGD: Provides exposure to long-term gold bullion holdings while generating income through a covered call spread.
  • Focus: Diversified equity and fixed-income exposure, with options to manage currency risk.

Market Implications

  • Innovation and competition: Issuers are responding to investor demand for tailored, outcome-driven products.
  • Leveraged ETFs: High-risk, high-reward options appeal to traders seeking amplified exposure to volatile markets.
  • Gold and income strategies: Growing interest in gold as a hedge against inflation and market volatility.
  • Active management: Shift from passive ETFs to actively managed funds for better risk-adjusted returns.

Competitive Dynamics

  • Manulife: Strengthens its position in the low-cost ETF space with a focus on income and quality growth.
  • LongPoint: Pioneers leveraged ETFs in Canada, targeting retail and institutional traders.
  • BMO: Leverages its research capabilities to offer strategy-driven ETFs, competing with other major issuers.

Long-Term Effects

  • Product diversification: Likely to drive further innovation in ETF structures and strategies.
  • Investor behavior: May shift toward more specialized, actively managed products for better returns.
  • Regulatory considerations: Potential scrutiny of leveraged ETFs due to their high-risk nature.

This analysis highlights the evolving landscape of Canada’s ETF market, with issuers offering innovative solutions to meet investor needs.