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 09:24
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

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

Coinbase Products
open_in_newOriginal article

Estimated market influence

Manulife Investment Management

Positivesentiment_satisfied
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

Positivesentiment_satisfied
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

Positivesentiment_satisfied
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 Investment Management

  • Launched 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.
    • Equity funds focus on dividend growth globally (e.g., global and Canadian-specific strategies).
    • A monthly income fund targeting Canadian, U.S., and global dividend payers.
  • These ETFs aim to provide low-cost, intraday-traded options for advisors and investors seeking tailored income-focused portfolios.

LongPoint Asset Management

  • Introduced Canada’s first triple-leveraged ETFs in Canadian dollars, offering amplified exposure to major indices and sectors.
    • Products include:
      • 3X leveraged ETFs: Canadian banks (BNKU), gold miners (CGMU), and long-duration U.S. Treasuries (TLTU).
      • Inverse ETFs: -3X counterparts for the same sectors.
  • Filed for 2x leveraged single-stock ETFs, a first in Canada, targeting U.S. tech names like Coinbase (COIU CN) and MicroStrategy (MSTU CN).
    • Management fee: 1.55%.
  • These ETFs cater to traders seeking amplified exposure to high-volatility U.S. tech stocks.

BMO Asset Management

  • Launched a suite of actively managed ETFs led by Brian Belski, Chief Investment Strategist.
    • Products include:
      • A diversified equity and fixed income fund.
      • U.S.-tilted options with hedged units for currency risk management.
  • Introduced ZWGD, a gold income ETF providing exposure to long-term gold bullion with a covered call spread strategy.
    • Designed to enhance yield and cushion downside moves in gold, aligning with growing investor interest in inflation protection.

Market Implications and Competitive Dynamics

  • Increased competition: Major issuers are innovating to meet investor demand for tailored, outcome-driven products.
  • Shift towards active management: ETFs now offer more sophisticated strategies, challenging traditional mutual funds.
  • Leveraged and alternative investments: High-risk, high-reward options are gaining traction among speculative investors.
  • Gold and income-focused strategies: Reflect investor preferences for diversification, yield, and protection against economic uncertainty.

Long-Term Effects and Strategic Considerations

  • Innovation in ETF structures: Likely to drive further product development and competition among issuers.
  • Regulatory considerations: Potential scrutiny of leveraged ETFs due to their high-risk nature and retail investor appeal.
  • Investor education: Importance of understanding product risks, especially for leveraged ETFs.

Conclusion

The launches by Manulife, LongPoint, and BMO highlight Canada’s ETF market evolution towards specialization, innovation, and investor-centric solutions. These developments underscore the growing sophistication of Canadian investors and the competitive dynamics shaping the ETF landscape.

Note: This article is for informational purposes only. Investors should consult a registered financial professional before making investment decisions.