Archive for October, 2011

State of the Canadian ETF Industry Q3-2011

October 17, 2011


The recently released first Quarterly ETF Asset Flow Report (not available online) by the Canadian ETF Association (CETFA) shows some interesting trends. The industry is growing strongly with total net sales across all ETF providers of $2.77 billion. The number of ETFs is also exploding: 18 new ones were introduced during the last quarter alone bringing the total up to 213. So far this year, the most popular ETF categories have been Canadian fixed income, Speciality and Sector Equity. Surprisingly, despite the volatility in the stock markets, Canadian equity remained popular and ranked #4 in net sales. Here are some highlights from the report (Note that net creation refers to the creation of new ETF units):

Total Number of ETF Providers: 7 (iShares, Claymore, HBP, BMO, PowerShares, XTF and RBC)
Total Number of ETFs: 213
Number of new ETFs Launched in Q3-2011: 18

Total AUM with all ETF Providers: $39.668 billion
Largest ETF Provider: iShares (AUM of $27.045 billion)
Total net creations by all ETF providers YTD: $4.95 billion
Largest ETF Provider by net creations YTD: BMO
Top ETF by net creation YTD: BMO Covered Call Canadian Banks ETF (ZWB)

Largest ETF by AUM: iShares S&P/TSX 60 Index Fund (XIU), $10.505 billion
XIU’s share of the entire ETF industry: 26%
Second Largest ETF by AUM: iShares DEX Short Term Bond Index Fund (XSB), 2.06 billion

This & That: Gas Prices, TFSA debate and more…

October 13, 2011


Tomorrow’s Gas Price Today: Long-time Member of Parliament Dan McTeague runs a website that forecasts the next day’s gas prices for major cities across Canada. It can help you decide if you want to tank up today or wait until the next day. The website correctly forecast last week’s spike of approximately 6 cents a litre.

TFSA or RRSP: The Globe and Mail ran a extract from David Chilton’s The Wealthy Barber Returns. In it Dave offers an intelligent take on which vehicle is better for retirement savings.

US Economy in Recession: The New York Times reported that according to the Economic Cycle Research Institute, which calls itself the “world’s leading authority on business cycles”, the US economy is already in a recession or is able to enter into one.

Is it a bear market?: A bear market is typically defined as a 20% decline from a closing high to a closing low. Jason Zweig writes in The Wall Street Journal that this definition is just one of many and others have been in vogue in the past.

Greece and what investors should do about it?: In a pair of excellent posts, Larry Swedroe discusses the implications of the Greek situation and what (if anything) should investors do about it.

Around the blogs

Michael James provides a good reminder to clients of BMO InvestorLine: You have to make a call to move your existing US dollar holdings in your RRSP to the USD side of the account.

The Wealthy Canadian rounds up some of the model couch potato portfolios.

Canadian Couch Potato reported that diversified, passive model portfolio has held up rather well (so far) in the current market downturn.

Canadian Financial Stuff shared a very funny (okay, it won’t be so funny if it happened to me) video about bank fees.

Fraser Smith after whom a certain manoeuvre is named passed away recently. A guest author wrote a tribute to Mr. Smith on Million Dollar Journey.

Tracking spending is surprisingly useful in getting insights into where to cut back and save money. Triaging my Way to Financial Success offered a peek into his system for tracking spending. I use Microsoft Money myself and the good news is it is completely free now.

My Own Advisor offered his take on different ways to reinvest dividends.

On his Retire Happy blog, Jim Yih discussed ways to avoid probate fees but each method has its own set of complications.

Stock market volatility is not unprecedented

October 12, 2011


Many investors think that the extreme swings in the stock markets are unprecedented. It only feels that way. A recent article in SmartMoney charted the extreme market moves made by the Dow Jones Industrial Average for every year going back to 1929. Periods of volatility similar to the one we are experiencing now were seen in the 2008-09, 2001-03, 1987 and 1973-74 bear markets. In fact, the chart suggests that it is the period of unusual calm such as the one we experienced between 2004-06 that is unusual.

The experience of investors in 1932 can help put the current volatility in perspective. The Dow experienced more than 120 days of intra-day swings of 5 percent or more. So far this year, we’ve had less than 20 days of swings of that magnitude. But 2008 was a pretty bad year with slightly less than 80 days experiencing 5 percent swings.

Source: How to Tame the Volatile Stock Market,