TORONTO, ON--(Marketwired - November 24, 2016) - Exchange Traded Funds (ETFs) are increasingly playing an important role in Canadians' investment portfolios, with nearly one-third of Canadian investors (31 per cent) reporting they own ETFs, according to the first-ever ETF Pulse Survey from BlackRock Canada.1 The findings suggests this momentum is only expected to increase with a large proportion of ETF owners (93 per cent) and non-owners (38 per cent) surveyed showing an interest in purchasing ETFs in the next 12 months.
The survey, which looked at ETF awareness and usage amongst Canadians, found that education often plays a central role in ETF adoption. While more than half of Canadian investors are planning on learning more in the coming year, of those that don't currently own them, they are more than twice as likely to seek out more knowledge around ETFs next year, compared to the last 12 months.
"After a year of record growth, we're thrilled to see the continued thirst amongst Canadians for more ETF knowledge," said Warren Collier, Head of iShares, BlackRock Canada. "While the results demonstrate that Canadian's have a strong appetite to learn more about ETFs, it's clear that there continues to be an opportunity to help investors better understand their investment options."
The State of ETFs in Canada: How and Why Investors Use ETFs
The survey found that investors are choosing ETFs largely to replace mutual funds (41 per cent) and/or individual stocks (45 per cent), to improve diversification (53 per cent), and reduce their risk profile (43 per cent). These are consistent with Greenwich Survey2 of Canadian institutional ETF usage which points to an increase in ETF allocations among institutional investors in the coming year.
Of Canadian investors that currently own ETFs, the funds make up a meaningful proportion of their portfolio. They now equal the asset mix of other commonly held vehicles such as mutual funds and stocks. ETF owners currently allocate 20 per cent of their assets to ETFs on average, compared to individual stocks (24 per cent) and mutual funds (22 per cent). Seventy-one per cent of ETF owners see the funds as long-term investments or, as both long and short-term holdings - with the average holding period being 5 years.
ETF Category Growth: ETF Adoption Expected to Surge
The survey also revealed that the majority of non-ETF owners expect to begin using ETFs in the near future, with 62 per cent of non-owners expecting they'll begin to use ETFs in the next three years. This change could be prompted by more awareness around the benefits and value of ETFs. Once invested, ETF owners said they appreciate the low management fees (51 per cent), low transaction costs to buy and sell (34 per cent) and the ability to diversify and reduce risk (34 per cent).
"ETFs have democratized investing by providing investors with a robust range of investment strategies in a solution that is cost-effective, transparent and easy to use, and it's resonating," adds Collier. "Supported by record growth, it's encouraging to see that ETFs are coming into their own in Canada, and we believe well positioned to continue their momentum into 2017."
BlackRock is a global leader in investment management, risk management and advisory services for institutional and retail clients. At September 30, 2016, BlackRock's AUM was US$5.1 trillion. BlackRock helps clients around the world meet their goals and overcome challenges with a range of products that include separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. As of September 30, 2016, the firm had approximately 13,000 employees in 30 countries and a major presence in global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company's website at www.blackrock.com/ca / Twitter: @BlackRockCA / Blog: www.blackrockblog.com/can
iShares® is a global leader in exchange-traded funds (ETFs), with more than a decade of expertise and commitment to individual and institutional investors of all sizes. With over 700 funds globally across multiple asset classes and strategies and more than $1 trillion in assets under management as of September 30, 2016, iShares helps clients around the world build the core of their portfolios, meet specific investment goals and implement market views. iShares funds are powered by the expert portfolio and risk management of BlackRock, trusted to manage more money than any other investment firm.3
About the Survey
The BlackRock Canada 2016 ETF Pulse Survey is a Canadian study into the role of ETFs among Canadian investors, executed by Market Strategies International, an independent research company.
Over 400 respondents interviewed were a nationally representative online sample of household financial savings/investment decision makers, age 21-75, with minimum investable assets of $100K and aware of ETFs. All respondents were interviewed using an online survey. This study was sponsored by BlackRock Asset Management Canada Limited and its affiliates.
This material represents an assessment of the market environment as of the date indicated; is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular.
iShares® ETFs are managed by BlackRock Asset Management Canada Limited. Commissions, trailing commissions, management fees and expenses all may be associated with investing in iShares ETFs. Please read the relevant prospectus before investing. The funds are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.
© 2016 BlackRock Asset Management Canada Limited. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. Used with permission. iSC-2578-1116
1 BlackRock Asset Management Canada Limited.
2 Versatility Fuels Expansion: ETFs in Canadian Institutional Portfolios. Greenwich Associates, 2016. This study was sponsored by BlackRock Asset Management Canada Limited and its affiliates. Link here.
3 Based on US$5.117 trillion in AUM as of 9/30/16.