ETF Trends from the RBC Capital Markets Trading Floor - April 2025

April was a wild ride! Volatility was off the charts, as the 30-day pause on tariffs came to an end, and Trump ushered in his grand ‘Liberation Day’ to much fanfare and enacted sweeping global tariffs. This sent nearly all global markets and asset classes lower, the S&P 500 was down as much as -14% this month (April 7). It’s hard to believe the tariff meltdown happened less than four weeks ago, as markets have almost completely rebounded. By the end of April, the S&P 500 was down only -1%, and the TSX 60 was down just -0.6%.

Since 1950, no drop of 10% or more has ever fully recovered by the end of the month. However, a -1% decline is remarkably close. If there had been an extra trading day (May 1), April 2025 would have achieved the improbable a greater-than-10% round-trip reversal.

There was a significant turnaround in crypto products this month, and they were atop the ETF performance leaderboard. Bitcoin was up 12% in April, although many crypto ETFs are still underwater on a YTD basis.

Gold hit a record high in the middle of the month at $3,500/oz as a safe haven asset, before fading to $3,300.

On the negative side, energy equities and commodity ETFs struggled from a performance perspective. They were by far the worst performing sector due to continued weakness in crude oil prices. Oil had its largest monthly decline since 2021 as a burgeoning global trade war threatened demand expectations. WTI crude closed below $60/bbl at the end of the month, which marked oil prices down -16% in April.

ETF flows were really flowing in Q1, with US ETFs gathering an impressive $292 billion in the first three months of the year. April saw net ETF inflows of $62 billion, below the punchy YTD run rate of $97 billion per month. U.S. investors flocked to two areas of the market in particular: $12 billion went into S&P 500 ETFs and $16 billion went into short duration treasuries. Those two categories captured 50% of all inflows in April.

Flows to international equities slowed, as did inflows to leveraged ETFs. On a relative basis, however, both categories of ETFs remained relevant, maintaining a similar portion of overall flows (13% to international equities and 7% to leveraged funds). There was a big pick-up of activity to inverse ETFs, they added $2 billion, growing AUM by 15%. Gold bullion ETFs experienced impressive inflows of $4 billion, taking the win over Bitcoin ETFs, which gained $3 billion of new assets.

Other interesting areas of flow: chunky outflows from Chinese equities (-$4.5 billion / 20% of AUM), outflows from small caps (-$6.8 billion) and inflows to semiconductors ($3.2 billion).

Canadian-listed ETFs saw a drop-off of ETF inflows and a notable shift in the composition of inflows. April ETF net inflows were $8.6 billion, down ~40% M/M from March’s record amount of ETF inflows. It’s still an impressive absolute number, well above the 2024 monthly run rate of $6.4 billion of ETF inflows each month. The mix of inflows changed dramatically, with U.S. equities increasing in popularity. The prior two months had investors focused on owning domestic Canadian assets, followed closely by international assets. These ex-U.S. geographies accounted for 86% of March inflows and 80% of February inflows. U.S. assets (equity and fixed income combined) comprised 40% of ETF inflows in April, largely at the expense of Canadian equities.