Mackenzie Investments 2022 Year-End ETF Report: ETFs Continue to Thrive Despite Economic Uncertainty

The report finds that in 2022 Canadian ETF inflows topped $35 billion, while assets under management reached $314 billion, exceeding the $300-billion mark for the second time in history.

“The Canadian ETF industry had another strong year in 2022, and despite nearly unprecedented market conditions, experienced robust net inflows,” said Michael Cooke, Head of ETFs, Mackenzie Investments. “Generally speaking, periods of economic uncertainty and volatility tend to lead to increased ETF adoption as investors seek the benefits that ETFs can provide, such as liquidity, transparency, ease of use and product choice .”

The report identifies the top short- and long-term trends that will impact the growth of the ETF sector in the months and years ahead.  These include:

• Changing of the guard: The industry saw massive outflows in cryptocurrency ETFs in 2022 as investors began to re-evaluate the risky assets, while previously unpopular sectors are making a comeback, such as infrastructure. Amid rocky equity markets, investors also increased allocations to low-cost, market-cap weighted equity ETFs with $7 billion in net flows.
• Bonds ETFs boom despite rising rates: As rising bond yields offer more attractive entry points for investors, inflows into fixed-income ETFs, which took in $19 billion in 2022, will remain robust as the possibility of a slowing economy looms and investors embrace core asset classes for their portfolios.
• Solutions will take centre stage: More solutions-oriented ETFs may come to market as companies begin to offer an expanded range of all-in-one or objective-oriented ETFs, giving investors access to an array of investments in a single product.
• Digital economy driving interest: The demand for thematic funds, particularly those that deal in exponential technologies, will grow as emerging sectors such as the digital economy continue to develop and increase their global impact.

The report notes that the adoption rate of ETF products is accelerating in the Canadian marketplace, and Mackenzie Investments holds the view that the ETF industry will continue to see inflows and assets expand in the coming years.

“With the depth and breadth of product options available, investors can work backwards from their desired investment outcomes and then make choices on which ETFs best suit their portfolios. If Canadians still haven’t incorporated an ETF strategy into their portfolio, now is the time,” concluded Mr. Cooke.

To read the full report, please click here.