Most Conservative
The industry remains small compared with the mutual fund market, whose assets have advanced 8 percent this year to a record C$1.23 trillion as of May 31, according to data from the Investment Funds Institute of Canada.
“I don’t think we’re feeling any particular threat from ETFs,” said Ian Bragg, senior manager of research and statistics at Investment Funds Institute of Canada. “We see mutual funds and ETFs as different products serving different needs and they can work together.”
Still, some of Canada’s biggest mutual fund providers are investigating getting into ETFs, including Toronto-Dominion Bank and Mackenzie Investments, a unit of IGM Financial Inc, that manages about C$75 billion.
Mackenzie Investments is “still in the exploration phase and have made no decisions at this time” on pursuing ETFs, said Jeff Carney, CEO of Mackenzie, in an e-mail.
Toronto-Dominion CEO Bharat Masrani told reporters in March the lender may resume offering ETFs in Canada after exiting the business in 2006. Meghan Thomas, spokeswoman at the lender, declined to comment.
Canadians are among the most conservative investors in the world and even with the incoming rule changes are unlikely to abandon investment advisers en masse for ETFs, said Brian Gooding, head of distribution at Mackenzie.
‘Wild West’
“There will be a subset of people who decide they’re not getting value,” Gooding said. “It will be minimal.” Mackenzie offers fees as low as 0.85 percent on equity mutual funds for do-it-yourself investors, Gooding said.
Horizon’s push into active ETFs will help the company double its assets past C$10 billion in the next five years, Hawkins said.