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
