The business objective of the investment funds industry is a simple one – to deliver investment solutions to help Canadians build wealth. We accomplish our objective by connecting Canada’s savers with Canada’s economy.
The industry facilitates investment for households (34 per cent of Canadian households own mutual funds) and provides capital for business investment, with the lion’s share of investments made in Canada.
The industry is helping reshape Canada’s economy, generating economic activity that contributes significantly to Canada’s GDP and employment for almost 200,000 Canadians. The Conference Board of Canada estimated in 2012 that the industry contributes $17 billion annually to Canada’s GDP through direct and indirect activity. This is roughly equal to Canada’s air transportation industry and higher than traditional industries such as retail gasoline stations and the forestry sector.
Mutual funds and ETFs make it possible for ordinary people with small amounts of capital to participate in a professionally managed, diversified investment plan – something that at one time only the wealthy could access. More than 100 fund management firms in Canada offer nearly 3,000 funds, while assets under management continue to grow.
From 1990 to 2016, the amount of money Canadians invested in mutual funds skyrocketed from $100 billion to $1.3 trillion.
Canadians’ confidence in funds is also reflected in the percentage of household financial assets invested in them. In 2014, for the first time, Canadians placed significantly more money in investment funds (35 per cent of household financial wealth in mutual funds, ETFs and segregated funds) than in deposits (32 per cent), reflecting the steady growth in confidence that investment funds have experienced over the past two decades.
The funds industry offers Canadians a wide range of pricing structures, from commission-based to fee-based. Funds can be purchased through a variety of channels, including direct from fund firms, through discount brokerages and through advisors. More than 90 per cent of Canadians prefer to deal with advisors and the industry has responded with an advisory channel that is 98,000 strong.