How US$200-billion ETF provider VanEck is preparing its Canadian debut

New York-based exchange-traded fund provider Van Eck Associates Corp., known for its thematic ETFs, is gearing up for its first Canadian launch after hiring experienced local talent.

Van Eck Canada Inc.’s new chief executive officer, Kevin Gopaul, a 14-year veteran of BMO Global Asset Management and its former global head of ETFs, was hired in April to launch VanEck’s first products in Canada. The asset manager has offices in Europe, Australia, Asia and Latin America and manages US$200-billion in assets.

The timing of the first Canadian launch depends on preparation and regulatory approvals, Mr. Gopaul says, adding: “We’re moving with a real urgency because the market opportunity won’t wait.”

VanEck is known for targeted thematic products, including gold mining and semiconductor ETFs.

The firm’s “ambition is to become known as an authority in macro thematic investing in Canada,” Mr. Gopaul says.

“Van Eck has more than 70 years of conviction-driven research behind it already, so we want to bring that intellectual depth to the Canadian market in a way that hasn’t been done yet.”

That’s becoming difficult in an increasingly crowded Canadian ETF market that has ballooned to more than 2,000 products and 48 providers.

While this “boom time” makes for a tough market, says Daniel Straus, managing director of ETF research and strategy at National Bank Financial Inc., VanEck’s move makes sense.

“It had some of the first thematic and gold ETFs, very much putting its stamp on the industry, so you could say that it waited quite a while before expanding to Canada,” Mr. Straus says.

The company’s best-known products include the US$23.9-billion VanEck Gold Miners ETF GDX-A and US$7.5-billion VanEck Junior Gold Miners ETF GDXJ-A, which holds several small- and mid-cap Canadian gold miners.

The US$70.2-billion VanEck Semiconductor ETF SMH-Q “has skyrocketed to the top of its leaderboard” given the interest in AI, Mr. Straus says.

Mr. Gopaul says the firm plans to have “a meaningful initial lineup” in Canada to demonstrate its commitment and “give advisors real choice from day one.”

Canadians already hold a few billion dollars in U.S.-listed VanEck ETFs, particularly its gold, semiconductor and emerging-market debt products, Mr. Gopaul says.

So while the Canadian arm isn’t starting from scratch, it must decide whether to replicate existing U.S. strategies.

His team will be talking to advisors, institutional and retail investors to ensure products solve problems. Right now, many advisors and clients are concerned with capital preservation after a big run-up in the markets, he says, or they have an opinion about holding gold miners versus bullion, or they’re questioning whether the semiconductor trade is going to last. “That leads to different product development.”

Mr. Straus says providers that have come to Canada and just launched “sibling versions of their U.S.-listed funds into Canada have had mixed success.”

“The recipe for [VanEck’s] success will be if it can Canadianize its offerings,” he says.

That could mean putting a spin on their thematic ETFs that appeals to Canadians, specifically – whether it’s through income, light leverage, currency hedging or certain geographical exposures.

“Given that Mr. Gopaul is so experienced within the Canadian ETF industry, I’m sure there are some surprises to come,” Mr. Straus says.

VanEck Canada will be competing against all ETF providers, but more direct competitors will include Global X Investments Canada Inc. and Evolve Funds Group, both of which also focus on thematic ETFs, Mr. Straus says, as well as BMO ARK Innovation Fund ETF ARKK-NE.

Not all U.S. providers that have come to Canada have had a smooth ride. New York-based Wisdom Tree Inc. came to Canada in 2016 and had some success, but then sold its Canadian subsidiary to CI Financial Corp. in 2020.

Mr. Gopaul has hired two former colleagues as top executives.

Chris Heakes, who most recently was senior portfolio manager with Harvest Portfolios Group Inc., is VanEck’s managing director of investments. He worked with Mr. Gopaul for several years as portfolio manager of ETFs with BMO GAM.

Danielle Neziol, formerly vice-president of ETF online distribution at BMO GAM, joined VanEck as director of digital distribution and product strategy.

“I’ve worked with them both for a very long time,” he says. “I know how they operate and there’s a high level of trust and alignment between us.”

Mr. Gopaul says he expects to have a staff of about 10 in Canada within the next six months. Those roles include compliance, operations and strategy.

Firms are “putting their arms around some of their talent right now,” he quips.