Global X Investments Canada Inc. has launched nine new exchange-traded funds (ETFs), expanding its portfolio with fresh options focused on Canadian sectors, U.S. equities, and fixed-income securities. Three of these funds specifically target Canadian sectors, underscoring the growing investor demand for Canadian-centric opportunities as the domestic market remains a robust source of stable returns and resilience.

The nine newly launched funds add to Global X’s expanding lineup, which appeals to investors seeking both diversification and targeted exposure in their portfolios. This launch comes amid increasing competition within the Canadian ETF market as fund managers aim to innovate and respond to shifting investor needs.

“Best of Canada” ETF Suite: A Focus on Essential Canadian Sectors

In its latest release, Global X announced three ETFs within its “Best of Canada” suite, which targets key Canadian industries: telecommunications, groceries and staples, and insurance. Each fund provides unique sectoral exposure, allowing investors to gain access to some of Canada’s most essential and stable industries.

• Global X Equal Weight Canadian Telecommunications Index ETF (TSX: RING): Offering exposure to the Mirae Asset Equal Weight Canadian Telecommunications Index, this ETF enables investors to invest in Canada’s major telecommunications players in an equal-weighted structure. The focus on telecommunications, which has proven to be a resilient and steadily growing sector, particularly after the pandemic, meets demand for stable, dividend-yielding assets in investor portfolios.
• Global X Equal Weight Canadian Groceries & Staples Index ETF (TSX: MART): Focused on Canada’s essential goods sector, MART invests in companies within the Mirae Asset Equal Weight Canadian Groceries & Staples Index. The grocery and staples sector in Canada has seen consistent growth due to stable consumer demand and, increasingly, a focus on sustainability and local sourcing, which resonates with socially conscious investors.
• Global X Equal Weight Canadian Insurance Index ETF (TSX: SAFE): SAFE provides exposure to major insurance providers in Canada, an industry known for its defensive nature and stability during economic downturns. Insurance companies have also diversified into financial services, providing an attractive investment opportunity for those looking for stable returns.

Each of these funds has a management fee of 0.25% and is relatively concentrated, with portfolios of fewer than 10 constituents, aiming to provide investors with pure exposure to these sectors while maintaining simplicity and low cost.

In addition to these three funds, the “Best of Canada” suite includes the Global X Equal Weight Canadian Banks Index ETF (TSX: HBNK), which launched in July 2023 and has already amassed $930 million in assets under management (AUM). Focusing on Canada’s Big Six banks, this ETF has tapped into one of Canada’s most resilient financial subsectors, known for weathering economic fluctuations with minimal volatility. The addition of this banking ETF further strengthens Global X’s position in offering sector-specific Canadian investments.

Premium Yield Suite: A New Take on Fixed-Income Options

To meet the rising demand for income-generating products, Global X has introduced two funds within its Premium Yield Suite, focused on U.S. government bonds with active options overlays, targeting investors looking for enhanced yield potential.

• Global X Mid-Term Government Bond Premium Yield ETF (TSX: PAYM): With a management fee of 0.45% and a target duration of five to 10 years, PAYM aims to offer stable income while capitalizing on mid-term U.S. government bonds. This strategy is attractive to those seeking a moderate duration for fixed-income exposure, particularly as the U.S. Federal Reserve maintains a cautious approach to interest rate policy amid ongoing economic concerns.
• Global X Long-Term Government Bond Premium Yield ETF (TSX: PAYL): PAYL, which carries a management fee of 0.50%, targets U.S. government bonds with durations of 10 years or more. As long-term bonds often experience greater price fluctuations in response to interest rate changes, this fund provides an additional layer of income through its active options management strategy, which helps cushion against market volatility.

These bond-focused ETFs are particularly appealing in an environment of rising interest rates, where investors are re-evaluating traditional fixed-income portfolios. By combining the security of government bonds with the income-enhancing potential of options, Global X is positioning these funds as tools to generate attractive returns in an evolving rate landscape.

U.S. Equities: Small-Cap Exposure with a Twist

The recent launch also includes two ETFs providing exposure to the Russell 2000 Index, an index tracking U.S. small-cap stocks. These ETFs allow Canadian investors to access a broad swath of American small-cap companies, which historically have higher growth potential but also carry additional risk.

• Global X Russell 2000 Index ETF (Cboe: RSSX/RSSX.U): This ETF, with a management fee of 0.25%, offers exposure to the Russell 2000 Index using a traditional benchmark approach. It’s designed for investors who seek pure exposure to the U.S. small-cap market without the complexities of derivative strategies.
• Global X Russell 2000 Covered Call ETF (Cboe: RSCC): This fund, which comes with a higher management fee of 0.65%, implements a covered call strategy, allowing investors to potentially enhance income from the underlying small-cap stocks in the Russell 2000 Index. Covered call strategies are known to provide additional yield during sideways or slightly bullish markets, appealing to investors aiming for income with some exposure to small-cap growth.

Sector-Focused Equity ETFs: Oil & Gas and Gold Producers

Two other ETFs launched by Global X bring additional exposure to resource-heavy sectors, reflecting Canada’s dominance in the global natural resources market.

• Global X Equal Weight Canadian Oil & Gas Index ETF (TSX: NRGY): This ETF invests in Canada’s energy sector, particularly oil and gas companies, and comes with a management fee of 0.40%. With global oil demand projected to remain steady or increase in the medium term, this fund could appeal to investors looking to gain from Canada’s significant energy exports, especially as the country continues to diversify its oil and gas markets.
• Global X Gold Producers Index ETF (TSX: GLDX): Providing exposure to the Mirae Asset North American Listed Gold Producers Index, this ETF offers investors access to North American gold producers with a management fee of 0.40%. Gold remains a popular hedge against inflation and market volatility, especially as geopolitical tensions persist. This ETF could attract investors seeking stability and security through precious metals.

Other Recent Product Launches from Purpose Investments and National Bank Investments

In addition to Global X’s suite of ETFs, the Canadian ETF market has seen notable activity from Purpose Investments and National Bank Investments (NBI), who have each introduced new products aimed at diverse investment strategies.

Purpose Investments recently launched two single-stock ETFs focused on mega-cap stocks: the Meta Yield Shares Purpose ETF (Cboe: YMET) and the AMD Yield Shares Purpose ETF (Cboe: YAMD). Each fund has a management fee of 0.40%. These funds are designed to capitalize on the long-term growth potential of their respective companies, using an options strategy to provide some downside protection. This strategy responds to the increasing interest in high-conviction, tech-heavy portfolios while providing a cushion against market downturns.

Meanwhile, National Bank Investments launched three new funds: the NBI Senior Loan Fund, NBI Global Climate Ambition Fund, and NBI Sustainable Global Bond Fund. These funds target niche markets, from senior loans and climate-focused investments to sustainable bonds, offering distinct opportunities to investors focused on environmental and socially responsible investments. Management fees for these funds’ F-series are 0.70%, 0.75%, and 0.65%, respectively, reflecting their focus on specialized asset classes and active management.

A Competitive Canadian ETF Landscape

With these new offerings, Global X, Purpose Investments, and National Bank Investments are responding to a rapidly evolving ETF landscape in Canada. The country’s ETF market, valued at approximately CAD 350 billion, continues to grow as investors increasingly opt for ETFs over mutual funds due to their lower costs, greater flexibility, and expanding variety.

Market analysts have noted a significant shift in Canadian investor behavior in recent years, with an increased focus on thematic, sector-specific, and income-generating ETFs. Canadian-focused ETFs like Global X’s “Best of Canada” suite are positioned to capture interest from both domestic and international investors who are bullish on Canada’s resilient sectors.

As the Canadian ETF space grows more competitive, fund managers are expected to continue innovating, offering products that cater to niche investor preferences and align with shifting economic conditions, from rising interest rates to ongoing global uncertainties.

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Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

8th November, 2024