Canadian investors channeled C$103.7 billion of net new money into Canada-domiciled exchange-traded funds in 2026 through June 30, nearly double the C$57.8 billion gathered over the same period in 2025. Long-term growth has been even stronger; this year’s inflows were more than five times the total from the first half of 2020.
A First-Half Lead That Points to a Record Year
Those inflows, combined with rising markets, pushed net assets in Canadian ETFs to C$895.6 billion by June 30. (Net assets and flows exclude double counting that occurs when one ETF holds units of another.)
Closing In on the Trillion-Dollar Mark
Growth has been broad-based this year, with net inflows across nearly every asset class and strategy type, though not evenly distributed. Equity funds are far outpacing fixed income, alternatives, and capital preservation, while passive strategies continue to capture the largest share of new money. Within active management, growth is accelerating fastest in one-ticket asset allocation funds and systematic equity strategies. Here’s a closer look at where investors put their money in the first half of the year, according to Morningstar Direct data.
Equity Leads All Asset Class Flows
Equity ETFs haven’t recorded a single month of net outflows since April 2023. This year, they took C$75.3 billion of net flows, accounting for 72.6% of all new money in 2026.
Equity Owns Three-Quarters of the Flows
Of that, roughly a third apiece went to United States and Canadian equity, with the remaining third spread across international, emerging markets, and regional or sector-specific funds.
Fixed income inflows are a distant second, at 19.4% of year-to-date flows, with domestic bonds dominating. About two-thirds of fixed income flows this year have gone into Canadian fixed income.
Capital preservation strategies have barely registered, drawing just 0.7% of flows this year. That’s a sharp reversal from 2022, when high interest rates and equity market volatility pushed capital preservation inflows to an average of 28% of that year’s net inflows.
Alternative strategies (4.3%) and other asset classes (3.0%) also took relatively small shares of year-to-date flows.
Stand-Alone Passive Attracts Just Over Half of All Flows
Passive ETFs still make up a large share of the Canadian ETF market, and they captured 56% of this year’s flows. The remaining 44% flowing to active strategies was split between standalone active strategies (24%) and all-in-one asset allocation funds (20%).
Passive Leads, But Active Isn't Far Behind
Asset Allocation Funds Continue to Gain Ground
Roughly one in every five dollars invested in Canadian ETFs this year has gone into an asset allocation fund—a diversified, single-ticket portfolio that rebalances automatically to a target asset mix. Most providers offer a suite of these portfolios spanning different ratios of equities and fixed income, typically in 20% increments, and the industry has settled on common terminology for the five tiers:
- All-Equity (100% equity)
- Growth (80% equity, 20% fixed income)
- Balanced (60% equity, 40% fixed income)
- Conservative (40% equity, 60% fixed income)
- Income (20% equity, 80% fixed income)
Flows have skewed heavily toward the higher-equity end of the suite. Of the CAD 20.7 billion that has gone into asset allocation ETFs this year, well over half (57.4%) went to All-Equity portfolios, followed by Balanced (22.0%) and Growth (15.7%). Conservative and Income portfolios combined drew less than 5%.
The One-Ticket Portfolio Goes Aggressive
Systematic Equity Picks Up Speed
Within standalone active strategies, systematic equity has grown fastest this year. These strategies build portfolios using rules-based methodology rather than discretionary security selection, and adoption is accelerating on both sides of the market. Issuers launched a record 17 systematic equity ETFs in the first half of 2026, and the category’s share of total ETF inflows climbed to 10.2% last quarter, up from just 1.3% three years ago.
Systematic Equity's Share of Flows Jumps Eightfold in Three Years
The rules-based approach often requires less analyst staffing and entails lower research costs than discretionary management, and issuers have largely passed those savings on to investors through lower fees. A recent Morningstar study found that Canadian systematic equity ETFs cost 48% less, on average, than discretionary active ETFs in the same Morningstar Category.
The Industry Nears a Trillion-Dollar Milestone
Net assets stood at C$895.6 billion at the end of June. While ETF assets have certainly benefited from rising markets, continued inflows have played a significant role in asset growth. First-half net flows alone came to C$103.7 billion, so if the second half simply matches that pace, inflows would carry net assets to roughly C$999 billion before any market appreciation is factored in. With equity markets up for most of the year, even modest further gains should be enough to close the remaining gap and carry net assets past the trillion-dollar mark before year-end.
