Skip to main content

Featured

New Federal Budget to Deliver $1,100 Tax Credit for Personal Support Workers

                                                        Jobs and Families Minister Patty Hajdu  The federal government has announced a major new measure in Budget 2025 aimed at supporting Canada’s personal support workers (PSWs). The initiative introduces a refundable tax credit of up to $1,100 per year for eligible PSWs, a move expected to benefit more than 200,000 frontline care workers across the country. Unveiled by Jobs and Families Minister Patty Hajdu , the credit is designed to recognize the essential role PSWs play in Canada’s healthcare system, particularly in caring for seniors and vulnerable populations. The refundable nature of the credit means that even low- and modest-income workers, who may not owe income tax, will still be able to claim the benefit. The program will allow PSWs to claim five per cen...
Post a Comment
Read more

article

Labels

Investors Shift Focus: Canadian Mutual Funds and ETFs in the High-Interest Rate Era

 

Amid high interest rates and market volatility, Canadian investors have made significant adjustments to their investment portfolios. The spotlight is on both mutual funds and exchange-traded funds (ETFs) as they navigate this challenging landscape.

Over the past year, Canadian mutual funds experienced a rollercoaster of net redemptions. Investors pulled billions of dollars out, creating a trend that persisted for 11 consecutive months. The pattern began when the Bank of Canada initiated a series of interest rate hikes in March 2022. With short-term product rates reaching nearly six percent, many investors shifted toward more conservative investments. Additionally, market volatility played a role, affecting their willingness to invest in stock and bond funds.

Some notable net outflows from mutual funds include:

  • June 2022: A net withdrawal of $10.4 billion
  • September 2022: A net withdrawal of $9 billion
  • October 2023: A net withdrawal of $12.5 billion

In contrast to mutual funds, Canadian ETFs have maintained a more stable trajectory. While sales of ETFs have also slowed during this interest rate cycle, they have remained net positive. In 2023, ETFs saw net sales of $37.6 billion, slightly up from 2022 but down from their peak of $58.3 billion in 2021. These figures come from the Investment Funds Institute of Canada’s 2023 investment funds report.

The move from mutual funds to ETFs reflects a broader trend seen not only in Canada but also in the United States. Investors are shifting from more expensive mutual funds to the cost-effective alternative of ETFs. The appeal lies in the efficiency and flexibility of ETFs, which offer exposure to a diversified portfolio of assets at a lower cost.

As the high-interest rate era continues, investors will likely keep adjusting their strategies. The rise of ETFs and their ability to provide cost-effective diversification will remain a key factor in shaping the investment landscape.


Labels:

Comments

Post a Comment