Canada’s ETF Industry Hits the Trillion-Dollar Club

What You Need to Know:

• Canada's ETF gross AUM have reached CA$1 trillion following a decade of rapid growth.
• From 2016, the Canadian ETF market has grown faster than most global peers.
• Innovation in active, covered call, crypto and thematic ETFs has fuelled adoption.
• ETFs are gaining share from mutual funds due to cost, transparency and access.
• Broader distribution is making ETFs a core portfolio tool.

The Canadian ETF industry crossed CA$1 trillion in gross assets under management (AUM) capping a decade of rapid expansion. Assets have grown from roughly $110 billion in 2016 to more than $800 billion by year-end 2025. With more than 2,000 listed ETFs and annual issuer revenue now above $2 billion, the industry has evolved from a niche product category into a core part of Canada's investment ecosystem.

Key highlights include:

• Canada is one of the world's fastest-growing ETF markets: The 26% compound annual growth rate (CAGR) over the past decade puts Canada ahead of the global ETF industry's 22% CAGR and just behind the Asia-Pacific (APAC) industry's 27%.
• Innovation is driving adoption: Canada also recently (May 2026) crossed the 2,000 listed ETF mark, spanning core beta, active, asset allocation, covered call, crypto, alternatives and thematic strategies.
• Fastest-growing segments: Alternative ETFs have expanded to a 62% CAGR, followed by money market ETFs at 58% and asset allocation ETFs at 54%.
• Active ETFs are gaining share: Active strategies have grown from 16% of ETF assets in 2016 to more than 30% today, reflecting demand for more flexible and outcome-oriented solutions.
• Covered calls have gone mainstream: Covered call ETF AUM has climbed from $3.7BN in 2016 to $57B today, with equity strategies representing more than 95% of the category.
• ETFs are closing the mutual fund gap: Since 2016, ETF net AUM has grown at a 24% CAGR versus 8% for mutual funds. If current trends persist, Canadian ETFs could surpass mutual funds in AUM by 2035.
• Distribution is broadening: Online brokerages, advisors, and digital wealth platforms are making ETFs easier to access, with online and discount brokerage ETF assets growing at the fastest pace. This milestone reflects broad support for ETFs, which have become central portfolio building blocks across retail, advisory and institutional channels.

Note: Unless otherwise stated, this report uses gross AUM, which includes Canadian ETFs' holdings of other Canadian ETFs.

Canada's ETF Industry Ranks Among the World's Fastest Growing

Canada has been one of the world's fastest-growing ETF markets, expanding at a 26% CAGR over the past decade versus 22% globally. That growth has exceeded the U.S., Europe and Latin America, trailing only APAC at 27%. The U.S. market grew at 21%, reflecting the moderating impact of its much larger starting base and its significant share of global ETF assets.

Global ETF AUM Growth

Key Drivers Behind Canadian ETF Growth

Equity ETFs represent two-thirds of Canadian ETF gross AUM, followed by fixed income at 19% and asset allocation at 9%. Since 2016, alternatives have been the fastest-growing asset class, followed by money market ETFs and asset allocation ETFs. Active ETFs have also gained share reflecting demand for flexible and outcome-oriented solutions.

Gross AUM CAGR by Asset Class

Made in Canada: Record Product Expansion and Innovation

Product expansion and innovation have been central to the industry's growth. Canada now has more than 2,000 listed ETFs spanning core beta, active management, asset allocation, covered calls, crypto, alternatives and thematic strategies. As the birthplace of the first ETF and the first spot Bitcoin and Ether ETFs, Canada has continued to lead in product development, giving investors access to increasingly targeted, liquid and transparent exposures.

Asset Allocation ETFs

As a major growth engine, Asset allocation ETFs have been expanding at a 54% CAGR. The category gained traction after risk-based asset allocation suites being introduced by Vanguard across growth, balanced and conservative profiles, with several issuers later launching competing suites.

Crypto ETFs

Canada launched the world's first spot crypto ETFs in February 2021. As many issuers have entered the market, Canada also became the birthplace of spot Ether ETFs and the first North American market to list Solana and XRP ETFs.

Crypto ETFs now hold $6.2 billion in AUM. While assets have declined from peak levels due to market performance and U.S. spot Bitcoin ETF competition, crypto remains an important innovation milestone for Canada's ETF industry.

Cash and Money Market ETFs

As rising interest rates in 2022 made low-risk yield products more attractive, cash and money market ETFs surged. Cash ETFs offered yields above 5% at their peak although demand has since slowed as rates declined and regulatory changes took effect.

Money market ETFs have filled part of that gap, growing from $3.1 billion at the end of 2023 to $16.3 billion today. While growth may moderate from here, the category remains one of the fastest-growing areas of Canadian ETFs and a key cash-management tool.

Covered Call ETFs

Covered call ETFs have grown from $3.7 billion in 2016 to $57 billion today, making it one of Canada's most popular ETF segments. Equity strategies represent more than 95% of assets, while fixed income covered call ETFs, launched in 2023, have gathered more than $1.7 billion.

Strong Market Tailwinds and Compounding Effects

Market performance has also supported growth. Since 2016, the S&P 500 has returned 13% annualized, while the S&P/TSX Composite and MSCI EAFE gained 9% and 7%, respectively. Rising markets lifted ETF assets through price appreciation, while steady inflows reinforced the compounding effect.

Shift in Investor Preferences

Another key driver has been the shift from mutual funds to ETFs, supported by lower costs, transparency, intraday liquidity and evolving advisor practices. Since 2016, ETF net AUM has grown at a 24% CAGR versus 8% for mutual funds. Mutual funds remain roughly three times larger today, but current trends suggest Canadian ETFs could surpass mutual funds in AUM by 2035, subject to market, regulatory and investor-behavior assumptions.

Canadian ETFs May Surpass Mutual Funds in Net AUM by 2035

Note: This analysis uses net AUM rather than gross AUM, as net AUM is generally viewed as a more accurate measure of fund industry assets.

Broadening Access and Distribution Channels

Broader access and distribution have expanded ETF use beyond institutional investors and full-service brokerage channels. ETFs are now widely available through online brokerages, advisors and digital wealth platforms, making them easier to access across investor segments.

Online and discount brokerage ETF assets have grown at a 35% three-year CAGR, supported by low costs, ease of trading and rising self-directed investing. Advisors are also using ETFs more through model portfolios and fee-based solutions, creating a broader multi-channel access model.

Future Challenges

Despite strong growth, Canada's ETF market faces structural challenges. More launches have increased competition, fee pressure and “me-too” products. Meanwhile, limited market maker capacity and balance sheet constraints can make it harder for smaller or less-differentiated ETFs to scale. Canada also has a narrower product set than the U.S. in some specialized exposures, and taxation and regulatory differences can create an uneven playing field versus U.S.-listed ETFs. These factors make scale, differentiation and distribution increasingly important.

The Road Ahead for Canadian ETFs

Canada's path to $1 trillion reflects the combined impact of product innovation, strong flows, market appreciation and broader distribution. The industry now offers more than 2,000 ETFs across active, income, covered call, alternative and thematic strategies, giving investors more tools to build portfolios and express market views.

The milestone also shows that ETF adoption is no longer tied to a single product trend or market cycle. With sustained inflows, expanding use cases and deeper access across retail, advisory and institutional channels, ETFs are becoming a permanent and increasingly important part of Canada's investment landscape.