After reaching record inflows of $76 billion in 2024, Canadian ETF growth is projected to continue
TORONTO, Jan. 22, 2025 /CNW/ - Mackenzie Investments ("Mackenzie") today released its 2025 ETF Outlook (the "Outlook"), examining the growth of the exchange-traded funds ("ETF") industry in Canada throughout 2024 and identifying key themes that will influence the industry in 2025.
In 2024, ETFs crossed the $500 billion milestone in total assets under management, reaching $519 billion by year-end. This was driven by record inflows of $76 billion. Mackenzie forecasts another strong year ahead with market projections suggesting ETFs could grow by as much as 15-20 per cent, driven by their increasing use as a primary investment tool and rising interest among retail investors.
"Despite fluctuating market conditions, the Canadian ETF industry performed well in 2024," said Prerna Mathews, Vice President, ETF Product Strategy, at Mackenzie Investments. "As we navigate an uncertain economy with market volatility and continued geopolitical stress points, ETFs will continue to increase their appeal to investors who seek versatility, transparency and resilience."
In the Outlook, Mackenzie has identified five key investment themes for investors to consider and that will drive the industry in 2025 – and beyond:
- Navigating Economic Uncertainty: ETFs that provide exposure to defensive sectors or low-volatility strategies can help mitigate risks during periods of uncertainty. With the U.S. election and potential policy shifts influencing global markets, these ETFs can play a role in stabilizing portfolios during market fluctuations and help to maintain investor confidence.
- Global Diversification: Mackenzie believes diversification will be a key strategy for investors to manage risks. Emerging market ETFs and global fixed-income ETFs provide exposure to growth regions offering opportunities beyond domestic markets and help to distribute risk more effectively.
- Meeting Income Demand with Option-Based ETFs: As investors continue to seek alternative income opportunities and protection from market downturns, option-based ETFs can help fulfill income needs, maximize tax efficiency and manage risks with lower drawdowns in a volatile market.
- Importance of Active ETFs: The Outlook notes that actively managed ETFs will continue to be a popular option for investors who prefer to outsource portfolio management in areas where they lack knowledge or expertise, such as fixed income and emerging markets, or for those seeking to achieve higher returns. These ETFs can provide professional management and strategic allocation.
- Quality and Valuation: As market valuations reach mixed levels across various sectors, Mackenzie notes that ETFs focusing on quality companies with strong finances and steady earnings growth will appeal to investors seeking stability to create a solid base of dependable investments for long-term wealth preservation.
"ETFs continue to be an increasingly important component of portfolio construction providing investors with many benefits including diversification, intraday liquidity and flexibility. As we look to 2025, they will continue to provide investors with flexible, cost-effective investment solutions to help them successfully navigate fluctuating economic conditions," concluded Ms. Mathews.
To read Mackenzie's 2025 ETF Outlook, please visit: https://www.mackenzieinvestments.com/en/institute/insights/etf-outlook
About Mackenzie Investments
Mackenzie Investments ("Mackenzie") is a Canadian investment management firm with approximately $213 billion in assets under management as of December 31, 2024. Mackenzie seeks to create a more invested world by delivering strong investment performance and offering innovative portfolio solutions and related services to more than one million retail and institutional clients through multiple distribution channels. Founded in 1967, it is a global asset manager with offices across Canada as well as in Beijing, Boston, Dublin, Hong Kong and London. Mackenzie is a member of IGM Financial Inc. (TSX: IGM), part of the Power Corporation group of companies and one of Canada's leading diversified wealth and asset management organizations with approximately $270 billion in total assets under management and advisement as of December 31, 2024. For more information, visit mackenzieinvestments.com
SOURCE Mackenzie Investments
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