Industry Updates

Global ETF industry expected to double over the next five years, according to BMO

George Geddes

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Canada's ETF market continues to grow as its annual flow surpasses the mutual fund flows for the first time in a decade, according to Bank of Montreal's 2019 outlook



WisdomTree Canada in December said the Canadian ETF market's growth began to decelerate in 2018. This could have been a result of the positive start to the year for the equity market being erased by a poor Q3-Q4. The equity market's decline caused a major sell off and meant Assets Under Management remained close to the same figure in 2017.

Despite the market correction in the fourth quarter and a not so significant increase to the global AUM, there remains an expectation the ETF industry will bounce back. The ETF industry is projected to double to more than US$10tn over the next five years. With C$156bn in assets at the moment, the Canadian ETF market is forecasted to spike to C$400bn by 2024.

At the end of December, there were 6,483 ETFs available around the world. The global ETF market had ballooned to a total of US$4.7tn in assets by the end of 2018, a 12 per cent increase from the year's end in 2017.


The US market still dominates the global ETF market share. Following the launch of 163 new ETFs in 2018, the US ETF market saw inflows of US$316bn. Amid the struggling S&P 500, equity ETFs still saw the largest inflows of US$208bn with fixed income ETFs gaining inflows of US$75.29bn.


On the other side of the Atlantic Ocean, the European ETF market launched 112 ETFs in 2018. Europe seems to have faced a harder blow following the equity market's struggle, as the ETF market as a whole only saw inflows of US$53.48bn, nearly $22bn less than the US's fixed income inflows.


Japan's ETF market grew by 12.5 per cent throughout 2018, with US$306bn in assets. A key driver for the growth is the Bank of Japan, which now owns 69 per cent of all Japanese ETFs, according to BMO.


The Canadian ETF industry grew 6.5 per cent from 2017. Inflows of C$20bn means the market now has C$156bn in assets. BMO were hosts to the country's largest ETF in terms of flows, with the BMO S&P/TSX Capped Composite Index ETF seeing inflows in excess of C$1bn.

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