Gustavo Bernal Torres
Record High in ESG ETF Demand Comes with an Asterisk
ESG ETFs in Canada touch historic highs despite a constantly fluctuating market, with equity strategies leading the way.
In April, $642 million was invested in Canadian-listed ESG ETFs, increasing the year-to-date total to $1.6 billion. Despite a constantly unpredictable market rattled by geopolitical events and ongoing pandemic disruptions around the world, demand for ESG ETFs has hit new highs.
However, there’s one catch: institutional orders have dominated the inflows to Canadian ESG ETFs. Two ESG equities ETFs from National Bank Investments, for example, garnered $600 million in apparent institutional subscriptions in April. April's ESG ETF inflows would have been only $42 million without them (still positive, but more indicative of grassroots buying interest). Similar patterns of majority institutional demand that occurred against a background of reduced retail activity were seen in previous months of high ESG inflows.