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 09:23
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada's ETF market is seeing new products from Manulife, LongPoint, and BMO, offering active management, leveraged strategies, and gold-focused funds with yield.

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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: Business 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 market trends toward active management, leveraged strategies, and alternative asset exposure.

Manulife Investment Management

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

    • Fixed Income: A bond-focused fund blending government and corporate bonds across credit tiers to optimize returns while managing risk.
    • Equity Funds:
      • Global diversified strategy targeting dividend growers with strong business models.
      • Canadian-focused equity fund for investors seeking income from Canadian companies.
      • Monthly income ETF combining dividends from Canadian, U.S., and global markets.

  • Key Insight: Manulife’s move underscores the growing demand for low-cost, actively managed ETFs that provide income-focused solutions.

LongPoint Asset Management

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

    • Sectors Covered: Canadian banks (BNKU), Canadian gold miners (CGMU), and long-duration U.S. Treasuries (TLTU).
    • Inverse ETFs: Include -3X counterparts for shorting these sectors.

  • Proposed Single-Stock ETFs: Filed for 2x leveraged single-stock ETFs tracking U.S. tech names.

    • Examples: COIU CN (Coinbase) and MSTU CN (MicroStrategy).
    • Management Fee: 1.55%.

  • Key Insight: LongPoint’s offerings cater to high-risk tolerance traders seeking amplified exposure to volatile U.S. tech stocks, marking a first in Canada.

BMO Asset Management

  • Actively Managed ETFs: Introduced a suite of ETFs led by Brian Belski, Chief Investment Strategist.

    • Strategic Focus: Diversified equity and fixed income strategies with a U.S. tilt.
    • Options: Include hedged and unhedged units for currency risk management.

  • Gold Income Strategy ETF: Launched ZWGD, the BMO Gold Bullion Covered Call ETF.

    • Strategy: Provides exposure to long-term gold bullion while generating income through a covered call spread.
    • Purpose: Enhances yield and cushions downside moves in gold, aligning with growing interest in inflation protection.

  • Key Insight: BMO’s ETFs reflect a strategic focus on U.S. market exposure and innovative income generation, appealing to investors seeking diversification.

Market Trends and Competitive Dynamics

  • Shift Toward Specialization: ETF issuers are repackaging traditional mutual fund strategies into modern, low-cost ETFs to meet investor demand for tailored solutions.
  • Leveraged Products: The rise of leveraged ETFs highlights investor appetite for high-risk, high-reward opportunities, particularly in volatile sectors like U.S. tech.
  • Gold and Alternative Assets: Growing interest in gold as a hedge against inflation underscores the appeal of ETFs offering income and downside protection.
  • Competitive Landscape: The launches by Manulife, LongPoint, and BMO signal a competitive race to innovate and capture market share in Canada’s ETF space.

Business Impact and Industry Implications

  • Increased Product Variety: Investors now have access to a broader range of ETFs, from active income strategies to leveraged and gold-focused products.
  • Cost Efficiency: Low-cost ETFs are reshaping the market, offering greater accessibility to active management and specialized strategies.
  • Strategic Considerations: Issuers are focusing on niche markets, such as single-stock exposure and gold income strategies, to differentiate their offerings.
  • Long-Term Effects: The trend toward innovation may drive further product development, potentially increasing competition and pricing pressures.

Conclusion

Canada’s ETF market is evolving rapidly, with issuers responding to investor demand for tailored, outcome-driven products. The launches by Manulife, LongPoint, and BMO highlight the growing focus on active management, leveraged strategies, and alternative assets. These developments are reshaping the competitive landscape and offering investors new tools to achieve their financial goals.