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 07:19
  • 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 tailored investment options.

Coinbase Products
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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

Manulife's Launch of Active ETF Series

  • Introduced four new ETF series targeting fixed income and equity strategies.
  • Includes a bond fund blending government and corporate bonds across credit tiers for optimized returns in rate-sensitive environments.
  • Equity funds focus on dividend growers globally and in Canada, offering monthly income from a mix of dividends.

LongPoint's Triple-Leveraged ETFs and Single-Stock Plays

  • Launched Canada’s first 3X leveraged and inverse ETFs in CAD, targeting major indices, sectors (e.g., Canadian banks, gold miners), and long-duration U.S. Treasuries.
  • Filed for 2x leveraged single-stock ETFs, including COIU CN (Coinbase) and MSTU CN (MicroStrategy), with a 1.55% management fee.

BMO's Strategist-Led ETFs and Gold Income Strategy

  • Introduced a suite of actively managed ETFs led by Brian Belski, offering diversified equity and fixed income exposure.
  • Includes HEDJ for hedged U.S. equity exposure and ZWGD, a gold ETF providing income through covered call spreads.

Market Trends and Competitive Dynamics

  • Shift to active management: ETFs now offer tailored, outcome-driven strategies, reflecting investor demand for customization.
  • Leveraged ETFs: High-risk, high-reward products attract speculative investors but require careful risk management.
  • Gold's role: Increasing interest in gold as a hedge against inflation and market volatility.

Strategic Considerations

  • Innovation: Issuers are repackaging traditional strategies into ETFs, leveraging intraday trading and lower costs.
  • Competition: New products differentiate from traditional funds, potentially cannibalizing existing offerings.

Long-Term Effects and Industry Implications

  • Diversification of ETF market: Expansion into active, leveraged, and gold strategies broadens investor options.
  • Risk management: Products like ZWGD offer innovative ways to generate income while mitigating risk.

Summary

Canada’s ETF market is evolving with a focus on innovation, leveraging investor demand for tailored solutions. The launches by Manulife, LongPoint, and BMO highlight competitive dynamics and strategic shifts toward active management and specialized products. While offering opportunities for higher returns, these developments also pose risks, particularly with leveraged ETFs. The market’s expansion underscores the growing sophistication of Canadian investors and the adaptability of financial institutions in meeting these demands.