The world's largest ETF manager and Canada's largest asset manager are looking to transform the Canadian ETF market through a new strategic alliance.
BlackRock and RBC Global Asset Management announced a partnership that will deliver the most comprehensive suite of ETFs in Canada under a new brand, RBC iShares.
With a combined value of $63 billion, the suite will comprise 150 ETFs across index, factor, quantitative and active strategies.
There will be 106 high-quality, liquid, cost-competitive index solutions managed by BlackRock Canada and 44 index, smart beta and actively managed solutions overseen by RCB GAM.
Under the partnership, five of RBC GAM's existing ETFs will be merged with existing iShares ETFs on or about 5 April 2019. One RBC GAM offering will be terminated while the investment objectives and strategies of six RBC GAM index funds will also change.
"The changes will streamline and simplify the RBC iShares solution suite, and also result in tangible benefits to unitholders of the RBC Index ETFs including greater liquidity associated with the larger iShares ETFs and historically more favorable spreads on the secondary market, which will ultimately reduce transactional costs for investors," RBC GAM said.
"We are pleased to leverage the RBC iShares alliance for the benefit of investors, applying the expertise of the world's largest ETF and index manager to RBC Global Asset Management's line-up of index ETFs and index mutual funds," RBC GAM president Doug Coulter said.
While the two firms remain separate legal entities, they will employ a unified distribution model and work together to further strengthen and refine the product suite.
RBC GAM chief executive Damon Williams said the partnership is a win for Canadian investors.
"Canadian investors deserve a level of choice, quality and cost competitiveness that is second to none - and that is what RBC iShares delivers. This exciting step forward in the ETF space complements our continued focus on expanding our industry-leading Canadian mutual fund business," he said.
BlackRock head of US and Canada iShares, Martin Small said the aspiration is to set a new standard for the Canadian ETF market through high quality solutions and service.
RBC GAM is the largest mutual fund company in Canada by assets under management as at 30 September 2018. BlackRock is the world's largest ETF provider by assets under management as at the same date.