Courtesy of Eric Lim/Bloomberg LP

IShares expects Canada’s exchange- traded fund market will double to about C$100 billion ($100.8 billion) in three to five years and the company plans to offer products and partnerships with firms such as Sun Life Financial Inc. (SLF) to maintain its No. 1 rank.

IShares Canada, a unit of BlackRock Inc. (BLK), the world’s largest asset manager, is planning to unveil at least one new product in 2013, said Mary Anne Wiley, managing director and head of the Toronto-based company. The strategy for 2013 will be producing “themed” ETFs as opposed to those defined by geography, she said.

“We don’t need another Canadian equity ETF,” Wiley said in an interview at Bloomberg’s Toronto office. “Where I see demand is in strategy-based, theme-based products, income and yields. That could be done by combining equity and fixed income rather than going after a particular segment.”

The ETF industry in Canada had total assets under management of about C$54 billion as of October, according to iShares. The industry has grown 20 percent to 30 percent a year over the past five years, Wiley said. The Toronto Stock Exchange says it offered the world’s first ETF in 1990, tied to the TSE 35 Index. “We could double that size in three to five years, easily,” she said in the Nov. 21 interview. “More and more investors are using ETFs as part of their core investing.”

Assets under management grew 26 percent this year through October, with fixed-income products accounting for about 50 percent of net new funds, Wiley said.

IShares Canada says it holds a 76 percent share of the ETF market, or C$41.3 billion in assets under management. The company sells 88 ETFs, accounting for about a third of the 258 total ETFs available in Canada. The Top 10 largest ETFs belong to the iShares family.

“It’s still a small part of the pot, so we have a long way to go,” Wiley said.

Kevin Gopaul, chief investment officer with BMO Asset Management Inc., who runs the company’s ETF and mutual fund businesses, said iShares’ position as leader is not guaranteed. Continue reading →