ETF Round Up: Insights from Etienne Joncas-Bouchard - November 12, 2025
The Canadian ETF industry is closing out 2025 on a historic high, defying expectations and reshaping investor strategies. In this month’s ETF Roundup, Fidelity’s Étienne Joncas-Bouchard, Director of ETFs and Alternative Strategy, explores what’s driving record-breaking flows, why risk appetite remains strong despite global uncertainties, and how factor-based strategies and All-in-One portfolios can help investors navigate today’s complex market cycles. From the importance of diversification to adapting across regions and styles, this discussion offers timely insights for building resilient portfolios in an era of rapid change.
Canadian ETF market momentum and growth
The Canadian ETF market is experiencing unprecedented momentum, marking its best year ever with over $100 billion in net new assets by mid-November. This surge is largely driven by resilient equity markets and risk appetite among investors. Multi-asset ETFs have been a standout growth area, capturing about 10% of total industry flows. This trend reflects investors’ growing appetite for diversified investment vehicles within Canada’s evolving market landscape.
Canadian ETF industry trends - Asset class - Net flows ($M)
Investor risk appetite and diversification trends
Investors continue to favor equities over fixed income. There is balanced demand for international equities, with flows split between U.S. and other global markets. In fixed income, a shift from cash and short-term bonds toward corporate and longer-duration bonds indicates a willingness to accept more risk for potential returns. Growth-tilted and pure beta equity strategies are popular, with U.S. equities gaining traction since the fall.
Navigating market cycles and regional recovery
Market dynamics reveal regional differences in economic cycles. What is working in Canada and Europe appear to be signalling an early-cycle recovery phase, supported by fiscal and monetary stimulus, while the U.S. remains in a late-cycle environment. This affects factor performance: value stocks perform well in early-cycle, whereas late-cycle strategies such as momentum dominate in the U.S. Understanding these cycles is crucial for timing investments and selecting appropriate factor exposures.
Factor investing and tactical All-in-One ETF strategies
Factor investing plays a central role in portfolio construction. The Fidelity All-in-One ETFs offer diversified exposure across key factors such as value, momentum, quality, and low volatility. Momentum has been particularly favored recently, especially in U.S. markets, while Canada benefits from a blend of value and momentum, and international markets see strength in both. This tactical approach enables investors to capture factor premiums and adapt to changing market conditions, aiming for consistent alpha generation and improved risk-adjusted returns.
Fidelity All-in-One ETFs: Strategic allocation overview
Market concentration and small-cap opportunities
A notable development is the outperformance of anti-factor stocks, companies characterized either by high volatility, expensive valuations, and unprofitability (or a combination of these) that defy traditional fundamental strength. Mega-cap technology and AI sector names have driven this trend, experiencing rapid price appreciation fueled by heavy reinvestment and capital expenditure in growth initiatives. This challenges conventional factor investing paradigms and requires careful portfolio construction to balance exposure to these high-growth yet riskier assets. Additionally, the market remains highly concentrated, with a handful of mega-cap stocks (the MAG7) dominating index performance due to strong profitability and substantial free cash flow. While these companies offer higher quality, the concern is more in the trickle-down impact it is having on lesser quality names tied to the same investment themes. Conversely, small-cap stocks present opportunities for higher risk premiums and alpha potential, especially through active strategies applying rigorous quality and value screens.
Final thoughts
The Canadian ETF market’s record momentum, evolving investor preferences, and complex market cycles underscore the need for strategic diversification and tactical portfolio management. Embracing factor-based all-in-one ETFs, balancing exposure between mega-cap and small-cap opportunities, and understanding regional economic dynamics can potentially enhance an investor's portfolio. Maintaining disciplined risk management and a global perspective will be key to capturing growth while mitigating downside risks.
