- Global ETF industry assets up 32 per cent from 2018
to over US$6 trillion
- ESG (Environmental, Social and Governance) investing
emerged as one of the largest trends of 2019
- BMO Balanced ESG ETF (ZESG) launched in 2020, blending key
themes of ESG and asset allocation investing
TORONTO, Jan. 30, 2020 /CNW/ - BMO Global Asset Management
(BMO GAM) today released its annual ETF Outlook Report,
which reviews the exchange traded fund (ETF) industry, and
highlights trends for the coming year.
A Year in Review: 2019
The global ETF industry continued to expand, driven by strong
markets and positive net flows. The industry amassed US$6.2 trillion in assets by the end of
2019(1).
The Canadian ETF market now has more than C$200 billion in assets, with C$28 billion in net flows(2). Inflow
highlights in the 2019 market include:
- The Canadian ETF with the most inflows in 2019 was the BMO
S&P 500 Index ETF (ZSP, ZSP.U) with C$2.3 billion in new assets(2)
- The Canadian fixed income ETF with most inflows in 2019 was the
BMO Aggregate Bond Index ETF (ZAG) with C$1.6 billion net flows(2)
"ETFs are an incredibly effective investment tool in that they
become more efficient to trade and hold as they mature," said
Mark Raes, Head of Product, BMO GAM.
"As new ETFs come to market, providers will continue to push the
envelope when developing client solutions."
Today, BMO GAM offers 96 ETF strategies and has a market share
of 30.6 per cent in Canada,
according to Bloomberg data.
Key Sector Trends
Fixed Income: Changing market conditions and late cycle
fears have made fixed income a popular choice among investors
pivoting portfolios to a more defensive stance. Fixed income ETFs
were the inflow leader in Canada
in 2019.
Factor Exposure: Investors recognize how factor exposure
can benefit portfolio construction. The most popular exposure by
flows in 2019 was low volatility, as investors sought solutions to
decrease equity risk amid heightened market movements.
ESG: Investors have a greater understanding
of how corporate ESG incidents can impact profitability. There is
also a growing body of knowledge of the potential financial
benefits of highly rated ESG companies.
Asset Allocation: Awareness of asset allocation ETFs grew
in 2019, amassing $3 billion in
assets in Canada since their
launch in 2018. These funds are the ETF industry's solution to
balanced funds.
Liquid Alts: Liquid alternative public funds, including
ETFs, have emerged as a result of regulatory changes in
Canada. It will take investors
time to fully understand these products and how they react to the
market.
"The growth opportunity for ETFs remains significant as the
efficiency, low cost and tradability of ETFs resonates with
investors," said Mr. Raes. "We expect the industry to maintain its
growth trajectory in 2020, backed by greater adoption among
existing users."
To view the full report, please click here. For more information
on BMO ETFs, visit: www.bmo.com/etfs.
(1)ETFGI, January
2020
(2)National Bank, January
2020
®/™Registered trade-marks/trade-mark of Bank of Montreal, used under licence.
BMO Global Asset Management is a brand name that comprises BMO
Asset Management Inc., BMO Investments Inc., BMO Asset Management
Corp., BMO Asset Management Limited and BMO's specialized
investment management firms.
BMO ETFs are managed by BMO Asset Management Inc., which is an
investment fund manager and a portfolio manager, and a separate
legal entity from Bank of Montreal.
Commissions, management fees and expenses all may be associated
with investments in BMO ETFs. Please read the ETF facts or
prospectus of the relevant BMO ETF before investing. BMO ETFs are
not guaranteed, their values change frequently and past performance
may not be repeated.
For a summary of the risks of an investment in the BMO ETFs,
please see the specific risks set out in the prospectus. BMO ETFs
trade like stocks, fluctuate in market value and may trade at a
discount to their net asset value, which may increase the risk of
loss. Distributions are not guaranteed and are subject to change
and/or elimination.
S&P 500® is registered trademarks of Standard & Poor's
Financial Services LLC ("S&P") and "TSX" is a trademark of TSX
Inc. These trademarks have been licensed for use by S&P Dow
Jones Indices LLC and sublicensed to BMO Asset Management Inc. in
connection with ZSP and ZSP.U. ZSP and ZSP.U is not sponsored,
endorsed, sold or promoted by S&P Dow Jones LLC, S&P, TSX,
or their respective affiliates and S&P Dow Jones Indices LLC,
S&P, TSX and their affiliates make no representation regarding
the advisability of trading or investing in such BMO ETFs.
Forward Looking Statements
Certain statements included
in this news release constitute forward-looking statements,
including, but not limited to, those identified by the expressions
"expect", "intend", "will" and similar expressions to the extent
they relate to the Fund, the Manager and/or the Advisor. The
forward-looking statements are not historical facts but reflect the
Fund's, the Manager's, and/or the Advisor's current expectations
regarding future results or events. These forward-looking
statements are subject to a number of risks and uncertainties that
could cause actual results or events to differ materially from
current expectations. Although the Fund, the Manager, and/or the
Advisor believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance and,
accordingly, readers are cautioned not to place undue reliance on
such statements due to the inherent uncertainty therein. The Fund,
the Manager and/or the Advisor undertakes no obligation to update
publicly or otherwise revise any forward-looking statement or
information whether as a result of new information, future events
or other such factors which affect this information, except as
required by law.
About BMO Exchange Traded Funds (ETFs)
Established in
May 2009, BMO Financial Group's ETF
business is a leading ETF provider in Canada. BMO ETFs provide Canadian investors
with broader choices and greater access to an innovative portfolio
of investment products.
About BMO Financial Group
Serving customers for 200
years and counting, BMO is a highly diversified financial services
provider - the 8th largest bank, by assets, in North America.
With total assets of $852 billion as of October 31,
2019, and a team of diverse and highly engaged employees, BMO
provides a broad range of personal and commercial banking, wealth
management and investment banking products and services to more
than 12 million customers and conducts business through three
operating groups: Personal and Commercial Banking, BMO Wealth
Management and BMO Capital Markets.
SOURCE BMO Financial Group
