Making Room in a Crowded ETF SpaceJun 18, 2018

While I have been in the ETF business for 11 years, the last few years have been particularly unique as the Canadian market experienced explosive growth. Every month, new ETFs have been hitting the market and new ETF providers have emerged. With so many new products fueling competition and innovation, it has become more and more challenging to bring a product to market that stands out from the pack.

This timeline of ETF providers in Canada demonstrates how many players have entered the ETF space in recent years, and just how much the market has changed since iShares launched in 1999.

With so many products flooding the market, advisors often ask me how we decide what type of ETF to launch next. As a firm, we are always trying to develop the next best idea that will meet the needs of investors and advisors alike. There is always the risk that our next great idea is already being developed by one of our competitors, so getting our products to market quickly is key. However, being ‘first to market’ isn’t worth much if the products don’t fit the needs of our clients. To ensure that we are factoring in these perspectives, we start the product development process by reaching out to our community of advisors and ETF analysts for their insights.

We continue to hear a similar story from many of them—specifically that our clients are looking for fixed income solutions to help them manage risk and diversify their portfolios. I understand why this has been such a common sentiment. Influenced by many variables including interest rates, credit quality and the overall health of the economy, fixed income is a complex asset class. Even a savvy investor can find fixed income confusing and difficult to manage without specific expertise. And now with the hint of rising interest rates around the corner, the fixed income investment landscape could become even more unpredictable.

To help our clients address their exposure to fixed income in targeted and strategic ways, we recently launched three new, actively managed fixed income ETFs, each with its own mandate and investment objective:

As the Canadian ETF landscape grows and evolves, I look forward to continuing the conversation with advisors and investors to deepen our firm’s understanding of the types of products, investment solutions and platforms that are best positioned to help them achieve their unique goals and objectives.