ETF Round Up: Insights from Étienne Joncas-Bouchard - August, 2026
The Canadian ETF industry continues to show strong momentum. Industry assets have surpassed the $1 trillion mark, while investor demand remains robust despite periods of market volatility. At the same time, the market narrative appears to be evolving.
While AI-related companies continue to attract significant attention, other areas of the market have quietly gained traction. According to Etienne Joncas-Bouchard, Director of ETF and Alternative Strategy, the value factor has emerged as one of the stronger-performing factors across multiple regions this year, while market leadership has become increasingly broad-based.
ETF demand remains strong
July was another notable month for the Canadian ETF industry, with approximately $18 billion in net new assets flowing into ETFs. This brought year-to-date inflows to approximately $122 billion, keeping the industry on pace to exceed last year's record level of inflows.
One trend Étienne Joncas-Bouchard highlighted is the consistency of investor demand. Historically, ETF flows often slowed during the summer months, but that seasonality has become less evident in recent years as investors continue to incorporate ETFs into portfolios throughout the year.
Demand has remained strongest for equities, while fixed income continues to face challenges from rising yields, particularly at the longer end of the yield curve.
Value steps into the spotlight
Although momentum remains an important market factor, value has been attracting increased attention this year.
As of the end of July, value had performed well across Canada, the U.S. and international markets. Etienne noted that value has benefited from exposure to businesses tied to ongoing capital investment, including utilities, REITs and companies supporting broader infrastructure and development trends.
He also highlighted that value has historically tended to be less sensitive to inflation and rising rates than some higher-growth areas of the market. In Canada, value has been supported by sectors such as energy and materials, while some software companies have also begun appearing within value portfolios as their valuations have adjusted.
Taking a fresh look at emerging markets
Emerging markets have posted strong returns this year, but Etienne pointed out that those returns have become increasingly concentrated.
According to his observations, a significant portion of emerging-market index performance has been driven by just three semiconductor-related companies. As a result, emerging markets have become more closely linked to AI and semiconductor trends than many investors may realize.
This has important implications from a diversification perspective. While emerging-market indices may contain a large number of holdings, the underlying sources of return can be far more concentrated. That was one of the reasons Etienne discussed when explaining why Fidelity's All-in-One ETFs do not currently include a broad emerging-market allocation.
Instead, the portfolios seek diversification through a combination of developed-market exposure, factor-based strategies, fixed income and a small allocation to crypto assets.
Momentum is starting to shift
Momentum remains a meaningful factor, but its composition is evolving.
Etienne noted that momentum portfolios are no longer dominated exclusively by technology and communication-services companies. Today, they also include areas such as industrials, utilities and REITs that have demonstrated improving fundamentals and price trends.
In some cases, momentum and value are beginning to share more common holdings than they did a year ago. Companies benefiting from ongoing capital spending and improving earnings have become relevant across multiple factor strategies.
This shift highlights how factor exposures can change over time as market conditions evolve.
Innovation continues to drive ETF growth
Beyond market performance, structural trends continue to support ETF adoption.
Etienne pointed to growing usage among direct investors, many of whom increasingly use ETFs as core portfolio holdings. Advisors have also expanded their use of ETFs within discretionary and model-based portfolios.
He also highlighted the continued growth of active and quantitative ETFs. According to Etienne, every ETF launched in Canada during July was either actively managed or quantitatively driven, reflecting growing interest in a wider range of ETF solutions.
Key takeaway
While AI remains an important market theme, investors are seeing a broader set of opportunities emerge across sectors, regions and factors.
Value has attracted renewed attention, momentum is evolving beyond technology, and diversification remains a key consideration as market concentration persists in certain areas. At the same time, strong ETF adoption continues to reflect how investors and advisors are using ETFs to build portfolios in a changing market environment.
