ETF Round Up: Insights from Etienne Joncas-Bouchard

Canadian ETF industry trends – Asset class - Net flows ($M)

Global exposure in focus

International equities have seen consistent demand, supported by valuation advantages and improving earnings expectations. Fidelity’s All-International Equity ETF, which blends momentum, low volatility, quality and value factors, has resonated with investors seeking diversified exposure. Étienne noted that $18.9 billion has flowed into international equity ETFs this year, though a portion includes global ETFs. Momentum has led the recent performance, but the strategy’s balanced design helps manage risk across varying market cycles.

Addressing U.S. market concentration

The dominance of a handful of large-cap tech stocks in U.S. indices has prompted conversations around portfolio concentration. Fidelity’s All-American Equity ETF offers a diversified alternative, combining four factors to help smooth out exposure. While momentum has been the primary driver in 2025, other factors like low volatility and quality have faced headwinds, highlighting the importance of a multi-factor approach.

Multi-asset portfolios gain traction

Fidelity’s All-in-One ETF suite has emerged as a popular choice for advisors seeking broad diversification in a single solution. These portfolios are strategically allocated and systematically rebalanced, with active and factor-based components across equities and fixed income. Unlike many competitor offerings, Fidelity’s portfolios are built with selectivity in mind, holding roughly 2,500 securities compared to tens of thousands in passive alternatives. This filtering strategy is designed to aim for long-term outcomes, while employing a balanced approach to positioning. Notably, three of Fidelity’s multi-asset ETFs ranked in the top 10 for industry flows in July, including FBAL, FGRO and FEQT.

Fidelity All-in-One ETFs - Strategic allocation overview

Each of the Fidelity All-in-One ETFs (excluding Fidelity All-in-One Fixed Income ETF) has a neutral mix which includes a small allocation to Fidelity Advantage Bitcoin ETF® ranging between 0.5% and 3%. Additionally, if the portfolio deviates from its neutral mix by greater than 5% between annual rebalances, the portfolio will also be rebalanced. In the case of a Fidelity All-in-One ETF’s allocation to cryptocurrency, if the portfolio weight exceeds twice its neutral weight, the allocation will be brought back to its neutral weight with any proceeds being reallocated to the other Underlying Fidelity ETF’s at their approximate strategic allocations. Such rebalancing activity may not occur immediately upon crossing that threshold but will occur shortly thereafter. Due to rounding, the total may not equal 100%.

Active strategies on the rise

Active ETFs are gaining ground in terms of listings and investor interest. Fidelity has expanded its lineup to include ETF series of well-known mandates, such as Global Innovators (FINN) and long-short strategies. These products offer flexibility for advisors while maintaining the same underlying active management as their mutual fund counterparts. The broader industry trend suggests active strategies are becoming a key area of innovation.

Gold and Bitcoin: Quiet contributors

Despite strong recent performance, gold and Bitcoin haven’t seen the inflows expected. Bitcoin is included in Fidelity’s multi-asset portfolios, offering diversification benefits and potential risk-adjusted return enhancements. While their roles in portfolios differ, with gold often viewed as defensive and Bitcoin as more speculative, they’ve both contributed positively in recent months.

Final thoughts