ETF Round Up: Insights from Etienne Joncas-Bouchard

The Canadian ETF industry is experiencing strong momentum. According to Étienne, the industry is on pace for a record year, with $73 billion in net new assets already flowing in. Fidelity’s ETF lineup has played a meaningful role in this growth, reaching $20 billion in total assets under management and $10 billion in its All-in-One ETF suite. Balanced and growth-oriented products like Fidelity All-in-One Balanced ETF, Fidelity All-in-One Growth ETF, and Fidelity All-in-One Equity ETF have consistently ranked among the top-selling ETFs in Canada, signaling broad advisor adoption.

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

Global exposure adds value

Investor interest in international markets continues to grow. Flows into non-North American equities have outpaced domestic counterparts, supported by valuation opportunities, fiscal expansion in Europe, and currency dynamics. Fidelity’s portfolios have benefited from modest overweight positions in international equities, contributing positively to performance. This global diversification also introduces exposure to a broader set of sectors and currencies, enhancing portfolio balance.

Factor strategies in focus

Momentum has been a key driver of returns, but its expression varies by region. In the U.S., it’s largely tied to tech and AI-related growth. In contrast, Canadian and international markets have seen momentum overlap with value, favoring sectors like financials, industrials, and energy. Fidelity’s approach blends momentum, value, quality, and low volatility in a balanced framework. This style diversification is intended to support balanced exposure and help investors stay aligned through different phases of the market.

Managing risk with discipline

Fidelity’s ETF construction emphasizes quality screening and strategic diversification. While some competitors hold tens of thousands of securities, Fidelity’s All-in-One Balanced ETF typically includes 2,000–2,500 carefully selected holdings. The focus is on filtering out companies that don’t meet key factor criteria, such as profitability, valuation, or stability, rather than chasing speculative upside. Even with lower exposure to mega-cap tech names, the portfolios have delivered competitive performance.

Risk management remains central to the strategy. Rather than making concentrated bets, the portfolios aim to participate in market upswings while maintaining resilience during downturns. Rebalancing is done systematically, with inflows allocated to underperforming factors to maintain a neutral mix. This approach supports long-term consistency without relying on short-term market timing.

Final thoughts