TMX Group Accelerates its Evolution with the Addition of VettaFi

By: , TMX Group Feb 2024

In December, TMX Group announced an agreement to acquire the remaining interest in VettaFi, a leading indexing and analytics business we had made an initial investment in earlier in the year. The acquisition, which closed last month, fits squarely with TMX’s global growth aspirations and long-term strategic financial and transformational objectives. Most importantly, the addition of VettaFi represents a great deal for TMX and VettaFi clients and stakeholders in Canada, in the United States, and around the world.

Evolving to better serve our clients

VettaFi brings a dynamic new component to Global Solutions, Insights and Analytics (GSIA), our fastest-growing business segment, by increasing the depth and value of the data-driven insights we provide to clients, expanding our digital capabilities, and enriching our industry-leading support for ETF issuers.

Benchmarks and indices are a core information requirement for TMX’s increasingly global client base. VettaFi brings proven experts and an entrepreneurial spirit to our TMX Datalinx team, as well as key benchmark and index functions, including an index calculation engine, select underlying data sets, and product development and operational capabilities. Bringing these capabilities in house gives us greater flexibility and agility in how we serve our clients, enabling us to deliver tailored and effective solutions.

Diversifying and strengthening our business 

TMX has a long-term growth strategy to diversify, globalize, and innovate across the business. The acquisition of VettaFi accelerates that long-term strategy, as well as our financial and transformational objectives: to grow recurring revenue, revenue from outside of Canada, and to increase the percentage of revenue from our GSIA segment.

Continuing our tradition of ETF leadership

While VettaFi may be new to TMX, and brings with it many new capabilities, this deal furthers a longstanding tradition of leadership in indexing and ETFs for TMX.

Toronto Stock Exchange invented the first exchange-traded, index-linked product – the prototype to the ETF – in 1990. As the ETF industry evolved over the subsequent 33 years, TMX remained at the forefront of progress: working in close partnership with providers in launching the first fixed income ETF in 2000, and the first Bitcoin ETF in 2021.

Today, we have almost 1,000 ETFs listed on Toronto Stock Exchange, including 114 new ETFs joining the market last year. Canada’s premier market includes ETFs from 40 providers, representing more than $380 billion in assets under management.

The acquisition of VettaFi bolsters our ability to serve the evolving needs of this important ecosystem even better into the future.

At the forefront of a growing industry 

With this acquisition, TMX is deepening our investment in a large and growing market segment.

Secular trends, including the growth of passive investing and ETFs, the internalization of portfolio management, and the integration of ESG factors into the investment process, are creating benchmark and index opportunities.

Today, ETFs represent approximately 17% of total fund assets, and this is expected to increase to 24% in 2027, with thematic ETF asset growth driven by the adoption of AI, robotics and ESG. The overall value of the indexing market is approximately $5 billion today, and is expected to grow at a rate of 13% to 18% through 2027. By deepening our indexing capabilities, TMX Group is well positioned to capitalize on these secular trends.

As markets evolve, it’s imperative that exchanges evolve at the same pace – to better serve clients, investors, and the broader capital markets ecosystem. With this acquisition, we are continuing our efforts to build TMX even stronger, and to live our purpose to make markets better and empower bold ideas.


The views, thoughts and opinions contained in this Focus article belong solely to the author and do not necessarily reflect the WFE’s policy position on the issue, or the WFE’s views or opinions.