“The manufacturer entering the market today does need to put in place some sort of differentiator or value that sets them apart,” said Florence Narine, senior vice president and head of product at AGF Management Ltd., a mutual-fund provider that started offering ETFs in early 2017 and now has C$723 million under management in that businesses.
Boutique Managers
AGF tries to avoid overlap with its mutual-fund offerings, and Narine cited its Infrastructure ETF and ESG Factors ETF as two of its more popular offerings. “It is an ideal model for picking up on nuance and thematic aspects of the market,” she said. “I can only see it continuing to grow.”
Michael Cooke, head of the C$2.8 billion ETF business at Mackenzie Investments Corp., said growing competition means Canadian providers need to have a clear game plan. “It becomes pretty apparent if you’re a newer issuer that doesn’t have a well-crafted strategy and quite frankly the expertise that goes along with that,” he said.
There’s still plenty of room for Canada’s market to grow, said Daniel Straus, vice president of ETFs and financial products research at National Bank. While ETFs in Canada capture about 10 percent of the market, in the U.S. it’s closer to 20 percent.
“If the U.S. is at all a leading indicator for how Canadian investors might behave, the ETF market in Canada could be twice as big as it currently is and still be growing,” he said. “I still think there’s room for a long tail of smaller boutique asset managers who are offering a handful of unique solutions.”
This article was provided by Bloomberg News.