BMO Mid-Year ETF Report: ETFs Experience Record Flows, Provide Liquidity When Investors Need It

• In the first six months of 2020, ETF inflows in Canada reached a record $22.4 billion¹
• Fixed income ETFs provide investors liquidity during market sell-off

TORONTO, July 30, 2020 /CNW/ - BMO Global Asset Management (BMO GAM) today released a mid-year ETF Outlook Report, which reviews ongoing trends in the Canadian exchange traded fund (ETF) industry.

2020: Reflections to Date

The markets shifted rapidly in response to the COVID-19 pandemic and the resulting fiscal and monetary stimulus packages. Investors used ETFs to navigate this volatility and transform portfolios with an easy-to-use, single ticket solution. Driven mostly by net inflows as the market recovery continues, the Canadian ETF industry began the year at $205 billion and now sits at $217 billion². 

"The benefits and advantages of ETFs were evident over the last six months, including efficient trading, diversified portfolios, and transparency so that investors knew whether or not they were buying into companies that were driving the recovery," said Mark Raes, Head of Product, BMO Global Asset Management Canada. "Investors were able to use ETFs to navigate market turmoil and effectively manage portfolios. We can't overstate the importance of ETF liquidity when investors need it."

Key Trends

Fixed Income: This ETF asset class continued to trade and provide liquidity during the recent downturn in the fixed income markets, particularly corporate bonds.

Equities: Investors sought broad market exposures as they traded into equities at attractive valuations during the sell-off hoping to capture growth during the recovery.

Factor Rotation: The Quality Factor has outperformed, as the stressed market environment has highlighted the resilience of high quality companies with low debt, stable cash flows and high return on equity.

ESG: Investors turned to companies with strong governance during the recent market collapse – demonstrating an increasing awareness of the impact strong corporate governance has on a company's resilience under stress.

"With markets shifting faster and more dramatically than many expected, ETFs have clearly delivered, both by flows and by trading liquidity," said Mr. Raes. "We expect the record volumes of the first half of 2020 to be an indicator, not an anomaly, of future ETF acceptance."

To view the full report, please click here. For more information on BMO ETFs, visit: www.bmo.com/etfs.

¹ National Bank, June 30, 2020

²BMO Global Asset Management, June 30, 2020

BMO Global Asset Management is a brand name that comprises BMO Asset Management Inc., BMO Investments Inc., BMO Asset Management Corp., BMO Asset Management Limited and BMO's specialized investment management firms. 

BMO ETFs are managed by BMO Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal.

About BMO Exchange Traded Funds (ETFs)
BMO Exchange Traded Funds has been a leading ETF provider in Canada for 11 years, with 96 mandates and 30 per cent market share in Canada. BMO ETFs are designed to stay ahead of market trends and provide compelling solutions to help advisors and investors. This includes a comprehensive suite of ETFs developed in Canada for Canadians, such as cost effective core equity ETFs following market leading indexes, and a broad range of fixed income ETFs; solution-based ETFs responding to client demand; and innovation with smart beta ETFs, as well as combining active and passive investing with ETF series of award-winning active mutual funds.

About BMO Financial Group
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $987 billion as of April 30, 2020, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.

Internet: www.bmo.com   Twitter: @BMOMedia

SOURCE BMO Financial Group

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