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Canada Asset Management Market - Growth, Trends, COVID-19 Impact and Forecasts (2022 - 2027)

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  • 120 Pages
  • March 2022
  • Region: Canada
  • Mordor Intelligence
  • ID: 5239320
UP TO OFF until Dec 31st 2023

Key Highlights

  • Growth in Canada outpaced both the U.S. and the global industry, with AUM rising 14% during the year to US$3.6 trillion. Retail investment is gaining share in Canada, and the rising share of the market and the increasing sophistication of retail investors present asset managers with an opportunity worth monitoring. This trend is expected to continue over the next five years, with growth forecast at 9% annually.

Key Highlights

  • Certain active categories also generated strong asset growth in 2020, it noted, including large-cap equity funds, government-focused fixed-income funds, money market funds and specialized products. Even with a global pandemic, a lockdown-induced recession, and the specters of economic malaise and growing inequality, the total AUM in Canada’s investment fund industry grew by more than $2 billion. From a sales perspective, mutual funds saw net sales of $31 billion, an increase of 83% over the previous year, while ETF net sales reached $41.5 billion on the back of 48% year-on-year growth. Gross sales for mutual funds amounted to $300 billion, a historic record.

Key Highlights

  • Canadian investment managers have been investing in alternatives much before the counterpart countries hopped onto the bandwagon due to low-interest rates and volatile public markets. The fintech market in Canada is also growing at a fast pace, aiding the overall growth of the Asset management industry. The year 2020 was a transformative year for the Canadian asset management industry, through shifting consumer attitudes, a growing competitive landscape, and, ultimately, the COVID-19 global pandemic.

Key Highlights

  • Events of 2020 put Canadian asset managers on alert. Additionally, though the industry has shown its trademark resilience, homegrown leaders continue to feel the pressure of mounting competition, consumer shifts, and rippling impacts of the global pandemic. Big asset managers are looking at expanding into alternatives and low-cost beta products to the point where many players have gone down the route of partnering with a hedge fund or private equity managers on the alpha side and looking into ETF-style platforms on the beta site.

Key Highlights

  • The industry’s relationship with technology has also brightened, even if familiar uncertainties linger. While organizations are becoming more confident and adept in adopting the likes of blockchain, bots, data analytics, and artificial intelligence (AI), reservations persist as to how these resources will pay back their investments and how organizations can mitigate their potential risks. Moreover, considering that there is always a new competitor willing to look beyond these reservations, organizations are feeling the pressure to make a decision or fall behind.

Key Market Trends

The Growth Of Responsible Investment Fund in Canada

  • Responsible investment fund assets grew by 55% in 2020, compared to 11% growth for the fund industry overall. The responsible investment (RI) has taken its place as the predominant investment approach among Canadian investors. Assets in Canada being managed using at least one RI strategy increased to $3.2 trillion, compared to $2.1 trillion at the end of 2017. This corresponds to growth of 48.5% for RI AUM over a two-year period-equivalent to 21.9% annualized growth over two years. Responsible investing comprises a majority of Canada’s professionally managed assets, accounting for 61.8% of all Canadian AUM. This is a larger share of the overall market than the previous years, when RI assets attained a milestone of 50.6% of the Canadian investment industry.
  • The rising demand for RI among individual investors is being met with greater availability and diversity of retail RI products, as longer-standing RI firms expand their product offerings and newer entrants to the space launch RI products. Assets in designated RI retail mutual funds have increased to $15.1 billion from $11.1 billion two years prior, representing growth of 36% over two years. Meanwhile, assets in exchange-traded funds (ETFs) managed under RI strategies have more than doubled over the last two years, from $240.6 million to $654.9 million.

Exchange Traded Funds and MF in Canada

  • Canada’s exchange-traded fund industry reached quite the milestone last week, with net sales surpassing mutual fund sales for the first time in the country’s history. In 2019, ETFs were brought in $18.7 billion compared to $7.8 billion for mutual funds. Canadian ETF assets have climbed by 74% since 2015, but with only five banks and a handful of investment firms holding most Canadian assets. Also, since 2015, mutual fund assets have also increased by about 74%, a huge number considering the size of the industry.
  • Assets invested in ETFs and ETPs listed globally reached a record US$9.35 trillion at the end of first half of 2021, says ETFGI. ETFs and ETPs listed globally gathered net inflows of US$88.5 billion during June, bringing year-to-date net inflows to record US$660.73 billion which is higher than the prior record of US$293.69 billion gathered at this point last year.
  • The Canadian ETF space could reach another all-time high in 2021 as post-COVID economic opportunities and risks, along with product innovation, spur continued demand among investors. Besides shorter fixed income, there are also ETFs that invest in Treasury Inflation Protected Securities (TIPS), which can increase in value as inflation rises, or senior loan-based ETFs that protect investors from rising interest rates

Competitive Landscape

The Canadian asset management market is highly competitive, with the presence of major international players. The market studied presents opportunities for growth during the forecast period, which is expected to further drive the market competition. With multiple domestic players holding significant shares, the market studied is competitive.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

This product will be delivered within 2 business days.

Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.1.1 Macro-Economic Analysis of Canada (Disposable household income levels, savings and investment patterns, Canada Population By Income Group. Etc)
4.1.2 Insights on Asset Allocation of Population of Various Inceom And Age Groups in Canada
4.2 Market Drivers
4.3 Market Restraints
4.4 Technological Innovations
4.5 Industry Policies and Government Regulations
4.6 Insights on Various Trends Shaping The Asset Management Industry in Canada
4.7 Asset Management Process Flow
4.8 Insights into Fee Structure and Operating Cost**
4.9 Impact of COVID 19 on the Market
5.1 Asset Class
5.1.1 Equity
5.1.2 Fixed Income
5.1.3 Alternative Investment
5.1.4 Hybrid
5.1.5 Cash Management
5.2 Source of Funds
5.2.1 Pension Funds and Insurance Companies
5.2.2 Individual Investors (Retail+ High Net Worth Clients)
5.2.3 Corporate Investors
5.2.4 Others (Government, Trust Funds and Others)
5.3 Type of Asset Management Firms
5.3.1 Large Financial Institutions/Bulge Brackets Banks
5.3.2 Mutual Funds and ETFs
5.3.3 Private Equity and Venture Capital
5.3.4 Fixed Income Funds
5.3.5 Hedge Funds
5.3.6 Others
6.1 Market Concentration Overview (includes M&A Deals And Market Shares)
6.2 Company Profiles of Leading Managers
6.2.1 RBC Group
6.2.2 TD Asset Management Inc.
6.2.3 BlackRock Asset Management Canada Ltd.
6.2.4 CIBC Asset Management Inc.
6.2.5 Fidelity Canada Institutional
6.2.6 CI Investments Inc. (including CI Institutional Asset Management)
6.2.7 Mackenzie Investments
6.2.8 1832 Asset Management LP (Scotiabank)
6.2.9 Manulife Asset Management Ltd
6.2.10 Brookfield Asset Management Inc.*

Companies Mentioned

A selection of companies mentioned in this report includes:

  • RBC Group
  • TD Asset Management Inc.
  • BlackRock Asset Management Canada Ltd.
  • CIBC Asset Management Inc.
  • Fidelity Canada Institutional
  • CI Investments Inc. (including CI Institutional Asset Management)
  • Mackenzie Investments
  • 1832 Asset Management LP (Scotiabank)
  • Manulife Asset Management Ltd
  • Brookfield Asset Management Inc.*