ETFs
Strength keeps CIBC moving forward – ETF Express
CIBC Mellon | Best ETF Custodian in Canada | Best ETF Back Office Technology Provider in Canada | Best Overall ETF Administrator in Canada
Ronald C. Landry, Vice President, Head of Asset Management and ETF Solutions, CIBC Mellon answers questions.
Why do you think you won this award?
CIBC Mellon has a strong history as a provider of ETF and investment operations services here in Canada. We have been consistently providing asset management capabilities to ETF providers since 2009. This award is a testament to our ability to adapt to the ever-changing and innovative nature of the ETF market here in Canada. As a market leader in our field, we know the value of cutting-edge technology and the importance of customer service. When our customers contact us to launch a new product, we always adapt to meet these requests. Investors seek funds that meet the highest standards for resilience, timeliness and conviction, and we continue to help our clients build their future growth by providing an industry-leading platform and capabilities.
CIBC Mellon offers a wide range of ETF product types, including equity, fixed income, derivatives and commodity and currency funds. Over the past decade, our organization has achieved many milestones in the ETF space. We were the first service provider to join the Canadian ETF Association (CETFA) and are the only service provider represented on the CETFA Board of Directors. Additionally, we have also been the leading service provider for the following ETF categories: Cannabis, Cryptocurrency, Psychedelic, Active Management, High Interest Savings Account, Multi-Class Series and ETFs.
What is the size and scale of your business today?
Our company has experienced significant growth in size and scale since entering the space. With robust infrastructure and dedicated ETF services teams across all our business units, we can cater to a wide range of clients and products to efficiently manage a significant volume of transactions.
As the leading integrated services provider for ETF providers, we offer local market expertise, access to global resources and cutting-edge technology developed to meet the evolving service needs of ETF sponsors in Canada .
What trends have you observed over the past year?
As the vanguard of the ETF market, Canada’s unique blend of high governance and high innovation makes it an excellent market for new structures and ideas that also require a trust premium. Canadian ETFs brought in CAD 42.5 billion in 2023, with stock ETFs accounting for CAD 16 billion. Higher-yielding, shorter-duration products, such as high-interest savings accounts or money market products, have been at the forefront in terms of trends, with 9, 9 billion CAD in flows in 2023.
What are your plans to grow your business in the coming year?
At CIBC Mellon, we expect continued growth in the active ETF space, particularly in ESG, alternative, ETF series, high yield products, as well as money market and call options covered. In 2023, we saw the launch of more than 105 active ETFs, compared to just 42 passive ETFs, and we expect 2024 to be another strong year for high interest savings ETFs, marking the third consecutive year of positive growth. We also expect continued growth in covered calls for the second year.
As an active industry participant, CIBC Mellon has participated in key initiatives such as T+1 settlement cycles and submissions to enable underwriting on ETF creation. We participate in the Canadian Securities Administrators (CSA) Total Cost Reporting Implementation Working Group and have made formal presentations to local regulators to advance Canada’s regulatory environment. Our efforts aim to promote a level playing field and forward-looking regulations that facilitate future innovation, including allowing investors to access cryptocurrency and digital asset offerings through regulated instruments.
Where do you see the ETF industry evolving in terms of products in the coming year?
As we look ahead to next year, Canada’s ETF industry is poised for continued growth and forward-thinking solutions. With the growing popularity of ETFs as investment vehicles, we anticipate several key trends and developments.
With interest rates rising, there has been a real desire for high interest savings accounts. Money market products were also leaders in terms of flows. Another area we have observed is the covered call type products that have been launched.
We expect thematic ETFs to expand. These funds focus on specific sectors, themes or investment strategies and allow investors to align their portfolios with their interests or capitalize on emerging trends. With ESG a driver in this area, we expect continued growth in thematic ETFs targeting sustainable sectors or companies with a strong appetite for ESG practices.