Market Trends of Canada Asset Management Industry
Responsible Investment Funds are Driving the Market
The rising demand for RI among Canadian individual investors is being met with greater availability and diversity of retail RI products as longer-standing RI firms expand their product offerings and newer entrants to the space launch RI products. Assets in designated RI retail mutual funds have increased, representing a growth of 36% over the last two years. Meanwhile, assets in exchange-traded funds (ETFs) managed under RI strategies have more than doubled over the last two years in Canada. Responsible investment (RI) has taken its place as the predominant investment approach among Canadian investors. Assets in Canada being managed using at least one RI strategy increased subsequently over the years. Responsible investing comprises a majority of Canada’s professionally managed assets, accounting for more than 60% of all Canadian AUM.
Exchange Traded Funds and Mutual Funds are Driving the Asset Management Market in Canada
Canada mutual funds and ETFs invest in a wide range of asset classes in Canada. Depending on their mandate, these funds may invest in equities, fixed income, commodities, and alternatives. However, equities and bonds are the most common asset classes. These funds cover a wide range of stocks across all sectors of the market, as well as market caps and share classes. They can be indexed or actively managed. Besides shorter fixed income, some ETFs invest in Treasury Inflation-protected Securities (TIPS), which can increase in value as inflation rises, or senior loan–based ETFs that protect investors from rising interest rates.
