Canada’s ETF Scene Heats Up: Active, Leveraged, and Gold Strategies Make Waves

Canada’s ETF Scene Heats Up: Active, Leveraged, and Gold Strategies Make Waves

  • 03.06.2025 08:49
  • theglobeandmail.com
  • Keywords: ETF Innovation, Active Management, Leveraged Funds, Gold Exposure

Canada’s ETF market is heating up with new products from Manulife, LongPoint, and BMO, including active strategies, leveraged ETFs, and gold income funds.

Coinbase Products
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Estimated market influence

Manulife Investment Management

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Analyst rating: N/A

rolled out four new ETF series targeting fixed income and equity with active management focus on income and quality growth

LongPoint Asset Management

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Analyst rating: N/A

launched Canada’s first locally listed 3X leveraged and inverse ETFs, offering amplified exposure to major indices and sectors

BMO Asset Management

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Analyst rating: N/A

introduced a new suite of actively managed ETFs shaped by the insights of Brian Belski, Chief Investment Strategist at BMO Capital Markets

Context

Analysis of Canada’s ETF Scene: Key Insights and Market Implications

Overview

Canada’s ETF market is experiencing a wave of innovation, with major players introducing specialized products to meet investor demand for tailored solutions. This trend highlights the growing sophistication of Canadian investors and the competitive dynamics driving ETF issuers to innovate.

Manulife Investment Management

  • New ETF Series: Launched four new active management ETFs targeting fixed income and equity strategies.
    • MFCI: Blends government and corporate bonds across credit tiers for optimized returns in a rate-sensitive environment.
    • MFCA: Globally diversified equity fund targeting dividend growers with strong business models.
    • MFGO: Focuses on Canadian companies for dividend growth.
    • MFGU: Provides monthly income from a mix of Canadian, U.S., and global dividend payers.
  • Key Features:
    • Low-cost, intraday-traded vehicles.
    • Combines active management with a focus on income and quality growth.
  • Market Impact:
    • Offers new tools for advisors to build resilient, income-focused portfolios.
    • Reflects the shift toward outcome-driven investment products.

LongPoint Asset Management

  • Triple-Leveraged ETFs: Launched Canada’s first 3X leveraged and inverse ETFs, traded in Canadian dollars.
    • BNKU: Amplified exposure to Canadian banks.
    • CGMU: Focuses on Canadian gold miners.
    • TLTU: Targets long-duration U.S. Treasuries.
    • Inverse counterparts available for short positions.
  • Proposed Single-Stock ETFs:
    • COIU CN: Aims for 2x daily performance of Coinbase stock.
    • MSTU CN: Targets MicroStrategy shares.
  • Key Features:
    • Management fee of 1.55%.
    • Designed for traders seeking amplified exposure to high-volatility U.S. tech names.
  • Market Impact:
    • Sets a new benchmark for leveraged ETF innovation in Canada.
    • Attracts speculative investors seeking high-risk, high-reward opportunities.

BMO Asset Management

  • Actively Managed ETFs:
    • Launched a suite of funds led by Brian Belski, Chief Investment Strategist.
    • Include diversified equity and fixed income options with hedged and unhedged units for currency risk management.
  • Gold Income Strategy:
    • Introduced ZWGD, the BMO Gold Bullion Covered Call ETF.
    • Provides exposure to long-term gold bullion holdings while generating income through a covered call spread.
  • Key Features:
    • Combines gold exposure with yield enhancement.
    • Designed to cushion downside moves in gold, aligning with growing interest in inflation protection and diversification.
  • Market Impact:
    • Strengthens BMO’s position in the actively managed ETF space.
    • Addresses investor demand for alternative income strategies.

Market Trends and Implications

  • Innovation in ETF Product Development: Issuers are responding to investor demand for specialized, outcome-driven products.
  • Competition and Differentiation: Manulife, LongPoint, and BMO are competing to offer unique solutions, from active management to leveraged and gold-focused strategies.
  • Shift Toward Sophistication: Investors are seeking tailored solutions, reflecting a more mature and discerning market.
  • Regulatory Considerations: The rise of leveraged ETFs may attract regulatory scrutiny, particularly regarding investor suitability and risk disclosure.
  • Long-Term Effects:
    • Increased product diversity may drive higher ETF adoption rates.
    • Potential for market volatility as leveraged ETFs amplify price movements.

Competitive Dynamics

  • Manulife: Focuses on low-cost, active management with a strong emphasis on income strategies.
  • LongPoint: Pioneers leveraged ETFs, targeting speculative and high-risk investors.
  • BMO: Strengthens its position in actively managed ETFs with a focus on strategic diversification and gold-related income solutions.

Conclusion

The Canadian ETF market is undergoing a transformation, with issuers introducing innovative products to cater to evolving investor needs. While this trend signals growth and opportunity, it also highlights the need for investors to exercise caution, particularly with leveraged ETFs, which carry higher risks. The competitive landscape is likely to intensify as more issuers seek to capture market share through innovative product offerings.