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 06:28
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada’s ETF market is evolving with new products from Manulife, LongPoint, and BMO. These include active income funds, leveraged ETFs, and gold strategies, offering investors tailored solutions.

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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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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 strategies. This shift reflects broader trends in active management, leveraged exposure, and alternative asset classes like gold.

Manulife’s Active ETF Series

  • Products: Four new ETFs targeting fixed income and equity strategies.
    • Fixed Income: Low-cost, actively managed bond fund blending government and corporate bonds across credit tiers.
    • Equity: Globally diversified dividend-focused ETFs, including Canadian-specific exposure and monthly income options.
  • Key Features:
    • Focus on income generation and quality growth.
    • Low-cost structure, appealing to advisors and investors seeking resilient portfolios.

LongPoint’s Leveraged ETFs

  • Triple-Leveraged ETFs: Canada’s first 3X leveraged and inverse ETFs, traded in Canadian dollars.
    • Sectors covered: Canadian banks (BNKU), gold miners (CGMU), and U.S. Treasuries (TLTU).
    • Inverse counterparts offer -3X exposure.
  • Proposed Single-Stock ETFs:
    • COIU CN: 2x daily performance of Coinbase stock.
    • MSTU CN: 2x daily performance of MicroStrategy shares.
  • Management Fees: 1.55% for both ETFs, targeting high-volatility U.S. tech names.

BMO’s Actively Managed ETFs

  • Strategist-Led Products: Brian Belski, Chief Investment Strategist, shapes new ETFs reflecting BMO’s investment themes.
    • Diversified Options: Balances Canadian and U.S. equities, with hedged and unhedged units for currency risk management.
    • U.S.-Tilted Funds: Targeted exposure to U.S. markets.
  • Gold Income Strategy: Launch of ZWGD, offering long-term gold bullion exposure with income generation through covered call spreads.
    • Designed to provide diversification and inflation protection.

Market Trends and Implications

  • Increased Competition: Major issuers are innovating to capture investor demand for specialized products.
  • Leveraged ETFs: High-risk, high-reward options catering to active traders, with potential for significant market impact.
  • Gold and Income Focus: Growing interest in alternative assets and income-generating strategies, driven by economic uncertainty.
  • Cost Efficiency: Low-cost ETFs are reshaping traditional mutual fund markets, offering greater accessibility for investors.

Competitive Dynamics

  • Manulife: Repositioning mutual fund strategies into ETFs, leveraging its established brand and active management expertise.
  • LongPoint: Pioneering leveraged ETFs in Canada, targeting high-volatility sectors and single-stock exposure.
  • BMO: Leveraging its investment research to offer diversified, actively managed ETFs with strategic positioning.

Strategic Considerations

  • Investor Demand: Shift toward tailored, outcome-driven products reflects evolving investor preferences for customization and performance.
  • Regulatory Environment: Potential scrutiny of leveraged ETFs due to risks associated with amplified exposure.
  • Long-Term Effects: Increased product diversity may drive market growth, but also requires greater investor education on risks.

Conclusion

Canada’s ETF market is at a pivotal stage, with issuers responding to investor needs through innovative product offerings. The rise of active management, leveraged strategies, and alternative assets signals a maturing market with growing opportunities for both issuers and investors.