Assets held in Canadian exchange-traded funds (ETFs) have surpassed $500 billion for the first time amid both record inflows and new funds launched within the country.
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ETF assets under management (AUM) stood at $519 billion at the end of December, according to National Bank of Canada (TSE:NA). The rise in assets under management was due to both market returns and record inflows of C$76 billion (U.S.$52.90 billion) during the year.
Inflows to Canadian ETFs last year were 45% higher than the previous annual record set back in 2021. ETF providers enjoyed strong inflows across several fund types in 2024 as markets rallied, with the Toronto Stock Exchange, Canada’s main bourse, hitting record highs.
Crushing Mutual Funds
Overall, ETFs outsold mutual funds for a third consecutive year in 2024, according to National Bank. Mutual funds saw modest capital inflows of C$8.3 billion in 2024 as the popularity of actively managed funds continues to wane among investors.
Investment firms have responded to investors’ preference for passively managed ETFs that tend to track the market’s performance by launching a record 224 ETFs last year. There are now about 1,500 ETFs available to investors within Canada. The Vanguard S&P 500 ETF (VOO) that tracks the benchmark U.S. index, saw the largest capital inflow in Canada last year at C$6.2 billion.
Is the Vanguard S&P 500 ETF a Buy?
The Vanguard S&P 500 ETF, which tracks the performance of the benchmark S&P 500 stock index in America, has a consensus Moderate Buy rating among 506 Wall Street analysts. That rating is based on 399 Buy, 102 Hold, and five Sell recommendations issued in the past three months. The average price target on the VOO ETF of $622.28 implies 13.08% upside from current levels.
