Canadian exchange-traded funds generated net inflows of $2.3 billion (US$1.8 billion) in July, a nine-month low, as a BlackRock Inc. bond fund appeared to suffer a large withdrawal by an institutional investor, according to National Bank of Canada.

Fixed-income ETFs saw $143 million of outflows, primarily because of a $1 billion outflow from the iShares Global Government Bond fund. The fund gathered significant assets last year after BlackRock cut the fee to 0.2 per cent, “but whatever institutional manager adopted its use might be now looking elsewhere for yield,” National Bank Financial analyst Daniel Straus said in a research note.

Equity ETFs in Canada generated $1.9 billion of inflows last month, with international funds posting a $907 million advance.

While July’s inflows were the lowest since October, Canada’s ETF industry is on pace for a record year, having brought in $32 billion so far in 2021, Straus wrote. Bitcoin, ESG, equities, short-term bond and asset-allocation portfolios have been popular among Canadian investors.

Equities in particular have dominated Canadian portfolios, accounting for more than 50 per cent of the year’s inflows so far. Cash alternative, emerging market equities and gold equities have experienced withdrawals, National Bank said.

After suffering outflows for the last 14 months, low-volatility ETFs brought in $71 million in July, helped by an improved performance that has kept pace with broad market benchmarks so far this year, the bank said.

The 22 ETFs introduced in July were heavily focused on ESG, with Franklin Resources Inc., CI Financial Corp. and Canadian Imperial Bank of Commerce all adding new products with that theme.