ETFs are rapidly gaining market share on mutual funds

Article Excerpt

By the end of 2024, Canadian mutual funds had assets under management of $2.24 trillion, compared to the $519 billion in Canadian ETFs. However, the overall distribution of investable assets is changing rapidly. Just five years ago, Canadian ETFs had $257 billion of assets under management, or 13% of total mutual fund and ETF assets combined. By the end of 2024, ETF assets represented about 19% of the total mutual fund and ETF assets combined. This indicates a rapid gain of market share for the ETF industry. Another indicator of the sharp swing away from mutual funds to ETFs is the net sales numbers (that is total inflows of new money minus total outflows). Over the past three years, mutual funds had net outflows of $85 billion while ETFs had net inflows of $148 billion. The largest category of mutual fund assets is balanced funds (holding both equities and fixed income assets). However, this category experienced significant outflows of assets over the past 3..