AFTER ALMOST TWO DECADES IN THE CANADIAN ETF INDUSTRY, WHAT’S NEXT?
The growth of ETFs has been one of the key developments in the investment industry over the past few decades. That’s the case worldwide, but also here in Canada, the birthplace of the ETF.
In 1990, the TSX launched the Toronto 35 Index Participation Units (TIPs for short), which was the world’s first exchange-traded fund. TIPs was soon followed by a second ETF, the TSE 100 Index Participation Fund (HIPs for short) that tracked the broader TSE 100 Index, and both these products were originally targeted for institutional investors.
Although ETFs have been around for over 30 years now, when I first started promoting these products back in 2003, they were still considered relatively new. Back then, there were only two ETF providers in Canada and just a handful of products available, compared to today where there are 40 ETF providers and over 1000 products. As one of the first ETF professionals in Canada, I spent the first five years speaking to individual investors and investment advisors and educating them on what ETFs were. In many cases, people confused ETFs with EFTs (electronic fund transfers). At first, ETFs were used mainly as a substitute for index-based mutual funds, but now they are used widely in lieu of mutual funds, individual stocks, and derivatives by both retail and institutional investors. And although ETFs are still dwarfed by the mutual fund industry, the growth and adoption of ETFs has been remarkable over the past 20 years.
Today, global ETF assets exceed US$9 trillion.1 According to data from the Canadian ETF Association (CETFA), Canadian ETFs account for $326.1 billion in assets, which is an increase of 37.7% year-over-year.2 To put this in perspective, at the end of 2013, ETFs represented 5.9% of total investment fund assets in Canada and today that number stands at 13.8%.2 It’s a significant increase in just under eight years, but with plenty of room still to grow, which is why I’m so excited with my new position at Franklin Templeton as Head of Platform and Institutional ETF Distribution.
Originally published at franklintempleton.ca.
PRESQUE DEUX DÉCENNIES PLUS TARD, QUEL AVENIR ATTEND LE SECTEUR CANADIEN DES FNB?
Au cours des 20 dernières années, le secteur des placements a été marqué par la croissance des FNB. C’est le cas partout dans le monde, mais aussi au Canada, berceau de ce type de produit.
C’est en 1990 que la Bourse de Toronto lançait le tout premier fonds négocié en bourse au monde : les parts liées à l’indice Toronto 35 (TIP). Peu de temps après, elle lançait les parts liées à l’indice élargi TSE 100 (HIP). Ces deux FNB s’adressaient au départ à des investisseurs institutionnels.
Publié initialement sur franklintempleton.ca.
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