ETF Round Up: Insights from Étienne Joncas-Bouchard - October, 2026
Higher interest rates continue to shape market conversations, but they haven't slowed investor demand for ETFs. During Fidelity's October ETF Roundup, Étienne Joncas-Bouchard, Director of ETFs and Alternative Strategy, discussed the impact of higher borrowing costs, the growing case for quality investing and why diversification remains an important consideration for investors.
Here are some of the key points from his commentary.
ETF demand remains strong
The Canadian ETF industry continues to see strong inflows, with approximately $156 billion in net new assets year to date and 11 consecutive months of more than $13 billion in monthly inflows. According to Étienne, investor interest in equities continues to outweigh demand for fixed income, although the conversation around bonds is beginning to evolve as yields move higher.
Rates on the long end remain a key focus
While the latest U.S. CPI reading was modestly above expectations, Étienne noted that the larger story is unfolding on the long end of the yield curve. A resilient U.S. economy, continued investment tied to AI-related infrastructure and strong corporate earnings have helped support markets, even as higher rates create headwinds.
Fixed income is drawing renewed attention
Investor demand continues to favour equities over fixed income, but the conversation around bonds is evolving. As yields have increased, the potential for future bond returns has become more attractive. While investors still remember the challenges fixed income faced in 2022, today's higher yields may warrant a fresh look as part of a diversified portfolio.
Why quality is gaining relevance
Quality stocks have not been the market leaders in recent years, but higher rates may be changing the landscape. Companies with lower leverage and stronger free cash flow may be better positioned to manage a higher cost of capital than those that rely more heavily on external financing. According to Étienne, that could become increasingly important as higher rates work their way through the broader economy.
Diversification remains important
Étienne highlighted Fidelity's all-in-one ETF portfolios as an example of this approach. The portfolios incorporate diversification across geographies, market capitalizations, factors and investment styles while maintaining strategic asset mixes over time. Rather than making concentrated calls on individual sectors or themes, the objective is to provide broad exposure across multiple sources of potential returns.
Key takeaway
Higher rates, evolving market leadership and concentration risk continue to influence portfolio decisions. For investors and advisors alike, the discussion increasingly centres on balancing opportunities with diversification, while maintaining a long-term perspective amid changing market conditions.