A majority of Canadian investment professionals (64%) are concerned that liquidity could be negatively impacted by the growing use of exchange-traded funds, according to the results of a survey administered by independent broker and financial technology provider ITG.

A majority of Canadian investment professionals (64%) are concerned that liquidity could be negatively impacted by the growing use of ETFs.

The poll was conducted at the Trading Matters Conference hosted by ITG in Toronto in late April 2017. The event drew more than 120 buy-side and sell-side attendees for panel discussions on topics including next-generation ETFs, the impact of MiFID II financial regulations and the role of independent investment research.

The survey also found that, to remain competitive in the ETF space, 38% of respondents say brokers need to provide capital as an ETF market maker, while 36% think brokers need to develop analytics to provide net asset value (NAV) transparency for ETFs. Only 19% see a need for brokers to build ETF-specific algorithms.

Commenting on the results of the survey, Etienne Phaneuf, CEO of ITG Canada, said: “The Canadian investment industry is in a period of evolution, with changing fund flows, market structure and financial regulation creating new challenges for institutional investors. We are committed to partnering with our clients to provide innovative tools and expert guidance to navigate the road ahead.”