Canadian exchange-traded fund (ETF) gross sales reached an all-time excessive in June with traders exhibiting unprecedented enthusiasm for bond funds, in keeping with the newest knowledge from the Funding Funds Institute of Canada (IFIC).
Gross sales of ETFs have been just below $10.1 billion in June with internet gross sales positive factors in each class, and bond funds amassing simply over half the overall. Traders additionally spent round $1.2 billion on bond mutual funds, at the same time as total mutual fund gross sales noticed internet redemptions for the third month in a row, with redemptions totalling $1.9 billion.
June gross sales of bond ETFs have been the very best on document, IFIC’s knowledge says. A lot of the bond ETF gross sales have been probably a single institutional investor “making strategic long-term allocations” to a number of BMO ETFs, mentioned Tiffany Zhang, Nationwide Financial institution Monetary’s vice-president of ETFs and monetary merchandise.
“These BMO ETFs all had very significant institutional-sized inflows around the same time, which was somewhere around the second half of June,” Zhang mentioned.
BMO’s Mixture Bond Index ETF (ZAG) noticed inflows of over $2 billion within the first half, almost 30 per cent of its whole belongings below administration.
Zhang mentioned the institutional numbers solely improve an already spectacular month. “Even if we take [the BMO transactions] out, June would be also pretty strong — a $5-billion inflow and then year to date we would have about $28 billion.”
Complete ETF gross sales for the primary half of 2024 have been $32.6 billion, round 80 per cent greater than the overall for the primary half of 2023. On a internet foundation, traders bought off $3.1 billion of mutual funds in the identical time interval.
IFIC’s knowledge recommend the 2024 ETF gross sales totals are almost equal to 2021 half-year numbers — a time when pandemic circumstances helped drive up financial savings — whereas a latest Nationwide Financial institution report, which filters out ETFs made up of different ETFs, says the 2024 half-year numbers are a document.
Yr-to-date gross sales of balanced ETFs, fairness funds and bond funds have been every greater than double the corresponding 2023 totals.
Since January, fairness ETFs have made up roughly two-thirds of all gross sales at round $19 billion. Vanguard’s S&P 500 Index fund (VFV.TO) alone introduced in $2.9 billion, in keeping with Nationwide Financial institution, changing into the most important ETF in Canada by belongings below administration.
Practically half of 2024 fairness ETF gross sales have been funds centered on the U.S. market, which Zhang mentioned “is not a surprise given how the U.S. Equity markets have done.”
Specialty and cash market ETF gross sales have been down considerably from final 12 months. Zhang attributes this to an enhancing danger urge for food. Cash market funds are inclined to rise in reputation when traders aren’t sure the place the market goes she mentioned, however “now they are seeing more opportunities from other segments within fixed income” or different segments.
Along with bond funds, cash market and specialty mutual funds noticed constructive internet gross sales in June. Cash market mutual fund gross sales have been the very best since March 2020, in keeping with IFIC.
Web belongings climbed throughout each ETFs and mutual funds, with $2.02 trillion in mutual funds on the finish of June and $440.5 billion in ETFs.
John MacFarlane is a senior reporter at Yahoo Finance Canada. Observe him on Twitter @jmacf.
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