by Editorial Team, AdvisorAnalyst
The numbers are difficult to argue with. By May 2026, Canada's ETF industry had accumulated nearly $95 billion in net flows for the year — 57% ahead of the prior year's run rate, with approximately $20 billion arriving every month. The industry had already captured close to two-thirds of the total assets gathered in all of 2025. For Ron Landry, Vice President and Head of Segment Solutions and Canadian ETF Services at CIBC Mellon, the figures represent more than a strong quarter. They represent a permanent realignment in how Canadians invest.
"2025 was an amazing year for the ETF industry here in Canada, and we thought, how can we continue the pace?" Landry tells Pierre Daillie on Insight Is Capital.1 "And it has continued. The flows are being knocked out of the park."
What makes the pace remarkable is the context against which it is occurring. Tariff uncertainty, Middle East geopolitical risk, elevated inflation, and a central bank unwilling to resume rate cuts did not slow the inflows. April alone saw nearly $13 billion enter equities — a month when, by conventional logic, investors should have been retreating to safety. Instead, they rotated out of HISA and money market products and moved back into equities and fixed income. The signal, Landry suggests, is behavioural as much as macro: investors have recalibrated their threshold for uncertainty, and ETFs are the vehicle of choice for acting on conviction.
Mutual Funds Knock on the ETF Door
One of the most telling structural developments Landry identifies is the conversion of long-resistant mutual fund managers. Firms that would have flatly rejected the idea of launching an ETF series as recently as six months ago are now actively exploring it. The reason is straightforward: they are watching a cohort of investors — digital-native, self-directed, and growing — who will not use mutual funds regardless of the underlying strategy's quality.
"There is a subset of investors who will never look to a mutual fund as an investment tool," Landry says. "They're realizing that if they don't do something, they're missing a whole generation of investors who are looking for platforms that are digital in nature, self-directed, do-it-yourselfers, and they want to access products through ETFs today."
The ETF series structure — wrapping an existing fund strategy in an exchange-traded format — gives traditional asset managers a path to reach that cohort without rebuilding their investment process. It is the most direct evidence yet that ETFs are no longer a product category competing with mutual funds. They are the distribution layer through which the next generation of investors expects to be served.
What the Flow Map Actually Shows
Despite the volume and velocity of innovation in the product pipeline, the flow map remains concentrated. The top ten issuers capture approximately 85-86% of net flows. Within the all-in-one asset allocation category — one-ticket portfolio solutions from iShares, Vanguard, and BMO — the top three issuers control roughly 92% of assets. The core of the market, in other words, remains anchored to passive, broad-based index products.
The innovation happening at the edges is real but additive. Single-stock ETFs — 80 launched in 2025, approximately 20 more by mid-2026 — and covered call strategies are capturing investor attention, particularly in the income space. A new distribution frequency trend has emerged: bi-weekly and even weekly income payments. Counterintuitively, the demand is not coming primarily from retirees.
"A lot of these asks are coming from investors who, in theory, you would think would be retired, looking for consistent cash flow, but it's actually coming from a younger cohort," Landry explains. "It's almost like they're investing in these products, but they want a paycheck on a bi-weekly basis coming out of their investment."
Landry frames this as a generational behaviour pattern rather than a product flaw. "There is a generational gap in the instant gratification that needs to be had versus I'm going to sock away $100 a week and let it compound over the next 20, 30, 40 years." Whether a sustained bear market would test the appetite for income ETFs remains an open question — but Landry notes that stress periods in 2020 and 2022 did not materially disrupt covered call strategies or their distributions.
The Product Pipeline as Market Intelligence
Landry's pipeline view — what asset managers are preparing to launch rather than what is already on shelves — offers a forward look at where institutional conviction is gathering. Digital assets and tokenization remain active areas of interest, driven partly by regulatory momentum. The CSA is now running tokenization workshops, and a number of issuers are revisiting whether to enter or expand in the crypto space. Meanwhile, active management has quietly become the dominant product formation story: nearly 60% of ETFs on the market are now active, and recent SIMA data suggests most of the last three to four years of ETF flows went to the active bucket.
"If advisors are still thinking of ETFs as passive only and looking at mutual funds as their active sleeve, they may want to revisit the overall landscape," Landry says. "Chances are it's going to be done at a lower cost."
Regulatory Cost Creep and the Investor Who Bears It
Total Cost Reporting (TCR), which will produce its first advisor-facing client statements in January or February 2027, is the regulatory event that Landry believes the industry is underestimating. The mechanics are complex — particularly on the dealer side, where capturing daily unit counts, applying the correct cost factor, accumulating those figures annually, and presenting them on a statement represents a significant operational lift. The cost of that lift has to go somewhere.
Regulators, Landry notes, are themselves adding to the cost burden. The BCSC significantly increased filing fees last year, and a number of issuers responded by rewriting their trust documents to pass those costs directly to the fund — meaning the investor.
"Every time there's a regulatory change, what is the basis point impact to that change?" Landry asks. "It's just like tariffs. The end consumer pays. Nobody's going to absorb these costs, especially with ETFs and the desire to keep MERs down. The cost has to go somewhere, and the end investor is going to pay."
ETF Survival: The Three-Year Rule
On the question of which new ETFs make it and which don't, Landry is direct. First-mover advantage is significant and well-documented — the first issuer to market in a new category captures a disproportionate share of long-term assets. But longevity requires a three-year runway, a credible track record, and sufficient brand recognition for advisors to confidently recommend the product to clients. The Emerge episode — in which investors were effectively locked out of their positions for nine months — remains a cautionary reference point for advisors considering startup issuers.
"You've got to give yourselves three years," Landry says. "It's an opportunity for people to get some track record, some performance. You start to get some volume. You might have launched a product that at that particular point in time wasn't necessarily needed in the market, so you may be ahead of the trend."
Know your product, he adds, is not a compliance platitude — it is the foundational advisor obligation in a market where fund names increasingly tell you less than you need to know about structure, leverage, hedging, and risk profile.
5 Key Takeaways for Advisors and Investors
1. ETF flows are structural, not sentiment-driven. Nearly $95 billion in Canadian ETF net flows through May 2026, sustained through geopolitical volatility, tariff noise, and rate uncertainty, is not a cyclical pattern. It reflects a durable shift in how investors — across all age cohorts — prefer to access markets. Advisors should plan their product shelf accordingly.
2. Active ETFs have already taken over the product formation story. Close to 60% of ETFs now on the Canadian market are actively managed, and the majority of recent flows have gone to active strategies. Advisors who continue to treat ETFs as passive-only vehicles and mutual funds as their active sleeve are working with an outdated framework.
3. Income ETFs are not just a retirement product. Demand for covered call ETFs, high-frequency distributions, and single-stock income strategies is coming disproportionately from younger investors seeking regular, visible payouts. Advisors must be prepared to explain these products as equity funds with an income overlay — not income instruments with equity characteristics.
4. TCR will arrive on client statements in early 2027 — prepare now. Total Cost Reporting will translate embedded fund costs into dollar figures for the first time. Advisors who have not already begun quantifying and communicating the full scope of their value — financial planning, tax strategy, behavioural coaching, estate planning — risk being defined by a line item rather than a relationship.
5. Know your product is the non-negotiable foundation. In a market with nearly 50 ETF issuers, increasing regulatory filing costs, and a growing inventory of structurally complex strategies, advisor due diligence cannot stop at the fund name or the distribution yield. Understanding structure, leverage, hedging approach, and issuer viability is essential — not optional — before placing client assets.
Footnote:
1 "Ron Landry: Canada's ETF Surge is Structural, not Cyclical." AdvisorAnalyst, 26 May. 2026.
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