BMO ETF Report

Global Events Promote Growth and Innovation in ETF Industry

TORONTO, ONTARIO--(Marketwired - July 28, 2016) - BMO Global Asset Management (BMO GAM) today released its semi-annual ETF Outlook Report, which highlights key trends that impacted the Exchange Traded Fund (ETF) industry in the first half of 2016 along with expectations moving forward.

According to the report, the Canadian ETF industry is on pace for another historic year with more than C$10.6 billion in inflows to date in 2016. Assets under management (AUM) have surpassed the C$100 billion mark - double the AUM of the industry four years ago. This compares to US$2.3 trillion in AUM for the U.S. market, US$529 billion in AUM for the European market and US$123 billion in AUM for the Asia-Pacific market.

"The Canadian ETF industry has had a tremendous start to the year and continues to evolve and innovate around changing investor needs," said Mark Raes, Head of Product, BMO Global Asset Management Canada. "Investors are recognizing the value of using ETFs to position their portfolios around market events and as a long-term holding."

2016 Trends and Growth Opportunities

The report examines how global market uncertainty will drive growth opportunities for the ETF industry in the second half of 2016.

Market Volatility and ETFs: Investors continue to recognize the benefits of using ETFs to address volatility and are moving to smart beta ETFs focused on income, quality and low volatility.

Sector-Specific ETFs: Investors are migrating away from direct-security holdings to sector-based ETFs that offer diversified exposure.

Fixed Income ETFs: The growth of fixed income ETFs is expected to outpace equity ETFs as investors look for yield solutions. The ETF industry has added more precise exposures, slicing the credit spectrum and segmenting by maturity.

Currency Exposure: In an environment of global economic uncertainty, currency exposure continues to be top of mind for investors. The ETF industry has evolved and offers both hedged and unhedged exposures, giving investors effective tools to manage currency risk in their portfolios.

Capturing Yield: In the current low-interest-rate environment, investors are looking beyond traditional exposures and are gravitating towards ETFs that can generate more income for their portfolios.

Looking Forward

The report also featured expectations for the future of the ETF industry, noting that the number of providers has continued to expand globally. In response, providers are focusing on creating products that stand out in the marketplace, allowing investors to benefit from having more choice than ever before.