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

March was a difficult month, with most areas of the market closing lower by the month’s end. US and Canadian equities declined, as did European stocks. Bonds rallied, albeit modestly. The one area that sticks out sparkled, from a performance perspective, is gold.  ETFs holding the precious metal outright were up ~7.5% in March. ETFs that hold gold miners were rewarded even more handsomely; the sector was up around 15%. ETFs that have even more creative exposures (think deploying leverage or an options overlay strategy) saw an even higher monthly return. Outside of gold, the only other bright spots were single-country exposures (India, in particular, had a strong month) and other actively managed international ETFs that operated opportunistically in this market.

ETF flows were incredibly resilient despite the performance of the stock market. March saw another $95 billion go into ETFs, shy of the $105 billion mark in February, but above the $91 billion gathered in January. S&P 500 ETFs have been steady collectors, another $15 billion was invested into products holding the primary equity benchmark. Other major indices - Nasdaq-100, Russell 2000 and DJIA ETFs - all had net positive inflows. Money also continues to chase the outperforming international equity ETFs. Pure European exposure led the way, adding nearly $8 billion in fund flows, followed by Global and ex-US. Despite the buzz and outperformance of Chinese equities, US-based investors have not been buying in. China and EM ETFs experienced net outflows. Bitcoin ETFs also had net outflows.

On the fixed income side, ETF flows continued to be clearly concentrated towards the ultra-short or short end of the curve. Ultra-short duration treasury ETFs saw another $10 billion of inflows, similar to the punchy inflows seen in February. Another parallel theme is a pull towards inflation-protected TIPS securities. These ETFs had another month of significant inflows, just shy of the $2 billion monthly inflow mark set in February.

Canadian-listed ETFs notched their largest month of inflows so far this year. Of the roughly $15 billion of new money going into ETFs, 40% was allocated to Canadian Fixed Income ETFs. These funds flows were concentrated in the ultra-short or short end of the yield curve. International equity ETFs saw $3.5 billion of new inflows this month as interest continues to accelerate with fund flows consistently growing month over month since the start of 2025. US equity ETFs flows have stabilized at the $1.4 billion level, flat to February, but far below the ~$2.5 - 3 billion monthly level over the past year.

Sources:
1. All data in this article is from Bloomberg LP Data. Some data may be delayed as certain issuers are unable to provide same day reporting to Bloomberg. Values in CAD.