ETF Round Up: Insights from Étienne Joncas-Bouchard - June, 2026
Markets have remained remarkably resilient this year, even amid shifting economic expectations, geopolitical developments and ongoing debate about the path forward for interest rates.
According to Étienne Joncas-Bouchard, one of the defining characteristics of the current environment has been the strength of momentum-driven investing, particularly as the AI theme continues to expand across the broader economy. At the same time, he believes investors should remain focused on diversification and fundamentals, recognizing that market leadership can evolve over time.
Momentum remains a key driver
Since 2023, momentum has been a powerful driver of returns, particularly in the U.S. While the AI trade initially centered on a handful of large technology companies, it has gradually broadened to include semiconductors, data centers, power infrastructure, storage providers and other businesses benefiting from increased AI-related investment.
As Etienne noted, this has created a challenging environment for stock selection, with a relatively small group of companies driving a significant share of market performance. Rather than attempting to identify individual winners, factor-based approaches can provide exposure to areas where price trends and fundamentals continue to improve.
Fidelity Momentum Factor ETFs are designed to capture areas of the market demonstrating improving price strength and fundamentals, allowing investors to participate in evolving market themes without relying on a single stock or sector.
Different drivers across regions
Although Momentum has been a common theme globally, drivers have differed across regions.
In Canada, momentum has been supported more by precious metals, materials and select companies than by AI-related technology stocks. Internationally, leadership has come from a broader mix of sectors, including industrials, utilities, telecommunications, and certain semiconductor-related businesses.
These regional differences highlight the importance of looking beyond a single market or investment theme. Opportunities can emerge from a variety of sources depending on economic conditions and market dynamics.
These differences highlight an important point: market leadership is not uniform. Opportunities can emerge from different sectors and themes depending on regional economic conditions, fiscal policy and market dynamics.
Why diversification matters
While momentum has led markets recently, Etienne emphasized the importance of maintaining exposure to multiple factors.
Diversified factor approaches combine characteristics such as momentum, value, quality and low volatility, recognizing that different factors tend to perform well at different points in the market cycle. As markets broaden, factors such as value and low volatility may play a larger role in driving returns.
Etienne pointed to Fidelity's All-in-One ETFs, which combines these factors within a single portfolio. The objective is to create a diversified investment experience that can participate in changing market environments while maintaining a rules-based approach.
A rules-based process can also help reduce behavioral biases by relying on data and fundamentals rather than short-term market sentiment. The goal is not to predict the next market leader, but to maintain a balanced portfolio that can adapt as conditions change.
ETF flows remain strong
Investor demand for ETFs continues to be robust in Canada. Industry flows totaled approximately $13 billion in May, following $13 billion in April. Monthly flows averaged roughly $20 billion over Q1 of 2026.
Etienne highlighted the rapid growth of the industry, noting that year-to-date end of May net inflows were approximately $24 billion in 2024, $48 billion in 2025 and about $86 billion this year.
The growth reflects increasing ETF adoption across advisor, institutional and direct-investor channels. Equity ETFs continue to attract the strongest demand, while interest in fixed income has been more measured.
Source: Bloomberg, as at May 31, 2026.
Looking ahead
Despite ongoing market headlines, Etienne remains constructive on the outlook. One of the more encouraging developments has been the strength of earnings growth, with broad-based positive forward-looking revisions.
He also highlighted Fidelity All International Equity ETF when discussing international opportunities, noting that factor-based approaches can help address some of the challenges and inefficiencies often found in international equity markets.
While geopolitical events and macroeconomic developments will continue to influence sentiment, current earnings trends indicate that fundamentals are supportive.
Final thoughts
Momentum, particularly through the AI theme, continues to influence markets, but opportunities are emerging across different sectors, regions and factors.
For investors, maintaining diversified exposure and focusing on fundamentals may be more important than trying to identify the next market leader. Whether through factor-based strategies, diversified portfolios or international exposure, staying invested with a disciplined long-term approach remains key as market leadership continues to evolve.
