ETF flows stagnated in Canada in January, with inflows barely positive at $22 million, according to a report by National Bank’s Daniel Straus, Ling Zhang and Tiffany Zhang. That’s in stark contrast to the strength of ETFs last year.
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The report says, “Redemptions from Canadian equity offset flows to fixed income and currency-hedged U.S. equity. The main story of the month was the 5% intra-month decline in CAD vs. the USD.” As a result of that dip, “U.S. equity ETF flow tallied to $117 million on a net basis, but currency non-hedged ETFs had outflows over $300 million.”
In the U.S., ETF flows were also flat, according to a second National Bank report that finds, “Total ETF assets dropped 4.7% to US$2.03 trillion, driven by stock market volatilities in the United States and worldwide.”
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The report notes some “asset classes experienced strong rotations as investors piled into safer assets.” While equity ETFs saw significant withdrawals, those “outflows were mostly offset by $13.5 billion in creations in safer fixed income assets. [And], commodity ETFs took in $2 billion toward energy and gold, two areas of the market driven by very different factors.”