Looking to grow its footprint in Canada, WisdomTree Investments Inc. (NASDAQ: WETF), the seventh-largest U.S. ETF provider, unveiled deals with Questrade Wealth Management Inc. and Questrade, Inc., one of Canada’s fastest-growing online brokerage firms.
“WisdomTree Canada has agreed to acquire the right to manage QWM’s eight ETFs with approximately CAD $89 million in assets under management, subject to obtaining unitholder and regulatory approvals,” according to a statement issued by WisdomTree.
Though the size of the ETF market there is small relative to the U.S., Canada is one of the fastest-growing ETF markets in the world as highlighted by “assets invested in ETFs/ETPs listed in Canada reaching a new record of US$101 Bn at the end of first half of 2017,” according to ETFGI, a London-based ETF research firm.
As part of the new deals, “WisdomTree Canada will become a premier provider of ETFs available for purchase on a commission-free basis on Questrade’s self-directed platform. This will include all of the WisdomTree Canadian ETFs,” according to the statement. “In addition, both companies will work together to develop and deploy a variety of ETF-focused educational initiatives and resources for Questrade clients, including webinars, newsletters and reports on investing topics.”
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Of the eight Questrade ETFs WisdomTree is acquiring the rights, some are currency hedged. WisdomTree is one of of the dominant providers of currency hedged ETFs. Four are equal-weight plays on U.S. equity stocks in sector such as consumer discretionary, healthcare and technology. Two of the other funds are mid-cap ETFs.
“The acquisition is subject to regulatory and unitholder approvals, and it is expected that for most of the funds, the Questrade ETFs will merge into existing ETFs managed by WisdomTree Canada, while WisdomTree Canada is expected to become the trustee and manager for one of the existing Questrade ETFs,” according to the statement.
Financial terms of the deal were not disclosed.
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