ETF Half Year Recap: Record Flows, New Products and Regulatory Highlights

Overview:

• Canadian ETFs had total inflows of CA$56 billion in the first half of 2025, the highest inflows ever in the first half of a year.
• U.S. ETFs had total inflows of US$542 billion in the same period, second only to the US$727 billion inflows in the second half of 2024.
• There were 199 new ETFs launched in Canada and 459 in the U.S. in 2025H1. Both numbers are record highs.
• Single stock ETFs have been rising stars in the U.S. and Canada.
• Crypto ETFs, private asset ETFs in the U.S., CLO and 0DTE ETFs in Canada have also facilitated the fast growth of the ETF space.
• In 2025H2, the market will be closely watching any development in the Ontario Securities Commission's (OSC's) ETF consultation in Canada and ETF share classes in the U.S.

Despite a volatile stock market and significant uncertainties around tariffs and geopolitical conflicts, the ETF machine shows no signs of slowing down. ETF assets in Canada and the U.S. both reached new heights with total assets under management (AUM) reaching CA$595 billion and US$11.5 trillion, respectively. Canadian ETF flows this year are on track to break last year's record. In the U.S., ETF flows were only slightly slower than in the second half of 2024, but still at a significant level. Product innovations and regulatory progress in the space have been the two main drivers of this strong growth.

Major product developments in the ETF space, including single stock ETFs, crypto ETFs, private asset ETFs (in the U.S.), collateralized loan obligations (CLOs) and zero days to expiration (0DTE) ETFs (in Canada) have attracted more investors to adapt the ETF wrap. As we move into the second half of 2025, this report highlights ETF driver growth in Canada and also discusses the main regulatory changes in Canada (including finfluencers and consultation on ETFs) and the U.S. (ETF share classes), which may facilitate future growth of the ETF industry in the second half of the year.

ETFs On Track for Record Inflows

Canadian and U.S. ETF markets both had strong flows in the first half of 2025. Canadian ETFs had total inflows of CA$56 billion, the highest inflows ever in the first half of a year. U.S. ETFs had total inflows of US$542 billion, only second to the US$727 billion inflows in the second half of 2024.

Canadian ETF Flows – 2025 H1 (Total: CA$55.9 billion)

Canadian ETFs had total inflows of CA$55.9 billion led by equity ETFs with inflows of CA$27 billion as U.S. and international equities drove the ETF boat.

• U.S. equities had CA$11 billion inflows, accounting for 40% of total equity inflows
• International equities also had CA$9.6 billion inflows with some investors diversifying away from North American stocks.
• Index based equity ETFs had significant inflows of CA$17.2 billion.
• Among equity ETFs, covered call ETFs excelled with CA$4.1 billion inflows as rate cuts took effect.

Fixed income ETFs had total inflows of CA$13.6 billion, led by aggregate bonds and IG corporates.

Money market ETFs, with inflows of CA$5.3 billion, started to see outflows in May and June indicating an increasing risk appetite among ETF investors. Target maturity bond (TMB) ETFs were popular with CA$702 million inflows, and CLO ETFs also accumulated over CA$250 million inflows.

Mixed allocation ETFs gained significant traction from investors with total inflows of CA$8.5 billion mainly driven by all-equity portfolios. Crypto ETFs in Canada had total inflows of CA$332 million, led by Solana ETFs and XRP ETFs with inflows of CA$195 million and CA$78 million. Spot Solana and XRP ETFs launched in Canada this year were the first in North America, attracting some international investors. Bitcoin and Ether ETFs in Canada had muted fund flows. Commodity ETFs in Canada had total inflows of CA$683 million, led by gold ETFs with inflows of CA$634 million.

U.S. ETF Flows – 2025 H1 (Total: US$542 billion)

The U.S. ETF market had total inflows of US$542 billion, mainly driven by US$318.2 billion inflows into equity ETFs and US$175.9 billion inflows into fixed income ETFs.

• Passive equity ETFs accumulated total inflows of US$191.2 billion.
• Active equity ETFs in the U.S. gained significant traction in June 2025 with inflow of US$127.0 billion

Among equity ETFs, option strategy ETFs are one of the fastest growing spaces:

• Equity ETFs employing option strategies attracted total inflows of US$38.8 billion.
• The Covered Call saw the largest inflows of US$26.6 billion, followed by Equity Buffer with inflows of US$8.4 billion.

Among fixed income ETFs:

• Aggregate bond ETFs accumulated the largest inflows of US$69.9 billion.
• U.S. Treasury ETFs were also popular with total inflows of US$48.8 billion.
• In terms of maturity profile, mixed maturity ETFs gained the most traction with total inflows of US$69.2 billion, followed by ultra short-term ETFs with inflows of $49.6BN.

Crypto ETFs in the U.S. had total inflows of US$16.7 billion.

Commodity ETFs also gained traction with total inflows of US$21.2 billion, led by gold ETFs with US$19.4 billion inflows.

Product Highlights

The ETF space never seems to lack new products. In 2025H1, there were 199 new ETFs launched in Canada and 459 in the U.S., compared to 104 and 411 new launches in 2024H2. These numbers are both record highs. A major driver of new products has been single stock ETFs. In addition, there have been several important product innovations in the Canadian and U.S. ETF space, including crypto ETFs, CLO ETFs, 0DTE ETFs in Canada and private asset ETFs in the U.S.

Single Stock ETFs

Canada: Single stock ETFs have experienced strong growth this year with inflows of CA$762 million. In addition, there were 26 new single stock ETFs launched in 2025H1. Before this year, Canada only had single stock covered call ETFs. Several 2x leveraged single stock ETFs were launched in Canada in June 2025. These products are expected to gain traction among retail traders.

U.S.: The volatile stock market this year has attracted more investors to single stock ETFs. In 2025H1, leveraged/inverse single stock ETFs had total inflows of US$5.2 billion, and single stock covered call ETFs had total inflows of US$8.7 billion. U.S. ETF issuers have taken note and responded to the significant interest in single stock ETFs. Around 90 new single stock ETFs were launched in the U.S. market, accounting for ~20% of total new launches.

Crypto ETFs

Canada: The Canadian ETF market remains at the forefront of crypto ETFs as issuers launched spot Solana and/or XRP ETFs. These launches attracted a total of CA$274 million inflows, indicating some interest from investors.

U.S.: The U.S. market only offers spot Bitcoin and Ether ETFs for now. However, U.S. ETF issuers have filed for various of crypto currency ETFs. In addition, more leveraged/inversed crypto ETFs have also been filed and launched to offer more types of crypto exposure to ETF investors.

The Securities and Exchange Commission (SEC) has been hesitant for a long time about approving spot crypto ETFs. Only Bitcoin and Ether ETFs have been approved after several years of battle between the SEC and ETF issuers. However, the environment has shifted significantly since former SEC Chair Gary Gensler’s departure. Under Paul Atkins' new leadership, the SEC has signaled a more constructive approach to crypto regulation. Given the positive momentum, Bloomberg ETF analysts have predicted that the odds of approval have increased to 95% for a number of crypto ETF filings as the SEC's engagement with the issuers has been remarkably positive. Although the timeline is less clear, a slew of new funds may hit the market in two to four months.

CLO ETFs and 0DTE ETFs in Canada

The strong popularity of CLO ETFs in the U.S. has led many Canadian ETF issuers to launch products in this space. In 2025H1, five Canadian ETF issuers raced to launch CLO ETFs. These ETFs invest primarily in U.S. floating rate, primarily AAA rated CLOs. Some of them also invest in European AAA CLOs. These CLO ETFs accumulated over CA$250 million inflows.

In June 2025, 0DTE ETFs were filed in Canada. These ETFs have been available in the U.S. since 2023 and have gained some traction from investors. Like the existing U.S. lineups, the newly filed DayMax ETFs in Canada will write 0DTE options in return for yields. However, it is differentiated from its U.S. counterparts as it uses 1.25x cash leverage and directly holds the underlying portfolio (as opposed to synthetically). The 1.25x cash leverage enables the DayMax lineup to provide richer yields without sacrificing too much upside potential. In addition, holding the underlying portfolio directly may increase the tax efficiency of covered call income as premium earned may be considered capital gains instead of income.

Private Asset ETFs in the U.S.

In 2025H1, the U.S. ETF market welcomed several private asset ETFs. One of the most noticeable was a unique private asset ETF that invests in private credit instruments sourced by a private credit giant, and private credit generally ranges between 10%-35% of the fund’s portfolio. Before this ETF, there were ETFs in the U.S. and Canada providing indirect exposure to private assets through investments in private equity (PE) firms or business development companies (BDCs). It was a groundbreaking moment for the industry, as ETF investors now have direct access to the US$30 trillion private asset market. In the end, this private credit ETF paved the way for future private asset ETFs to come to the market.

Regulatory Progress

Regulatory changes are important in ensuring the ETF industry can grow. In Canada, regulators published a consultation aimed at modernizing ETF regulations to facilitate fast growth. In addition to the U.S. crypto ETFs discussed above, the focus has been on ETF share classes, which are expected to elevate the U.S. ETF industry to the next level.

Canada: Finfluencer, OSC Study & CSA Consultation on ETFs

In June 2025, the Canadian regulators published the Canadian Securities Administrators (CSA) consultation on Enhancing Exchange-Traded Fund Regulation. The long-expected consultation is driven by the ETF review initiated by the CSA in 2023, which is likely to lead to regulatory changes that may change the industry landscape. The 25-page consultation paper includes 35 questions covering key topics such as AP arrangements, disclosure of portfolio information, ETF series of mutual funds and availability of U.S.-listed ETFs in Canada. In addition, the paper also covers topics such as disclosure metrics and monitoring of arbitrage and liquidity provision, which are more ETF issuer focused.

In addition to the OSC ETF consultation, Canadian regulators are also looking at regulations around "finfluencers". The Canadian Investment Regulatory Organization (CIRO) initiated a consultation on whether CIRO investment dealers offering order execution only account services (OEO dealers) can provide non-tailored advice to meet the needs of DIY investors. In addition, there are voices advocating for a more comprehensive regulatory framework for finfluencers.

U.S.: ETF Share Classes

ETF share classes have been the hottest topic in the U.S. ETF space this year. Over 50 ETF issuers have filed for the ETF share class structure, the SEC may approve its use in both passive and active strategies. If approved, the ETF share class may help U.S. ETFs bring in US$75 billion inflows per year based on Canadian experience. Over time, these ETF share classes have the potential to gather US$1.5 trillion in assets.

In April, a U.S. ETF issuer filed an amendment to their exemptive relief application for ETF share classes. The updated filing suggests that the SEC may be moving closer to signing off on ETF share classes. Another news article reported that the SEC told asset managers applying for ETF share classes to follow the amended filings. Based on this, many industry participants are expecting approvals from the SEC soon.

All eyes now set on the second half of 2025

In Canada, the industry is watching closely the OSC consultation on ETF regulations and how it may address potential gaps in ETF regulations. In addition, it will be interesting to see how new products such as CLO ETFs, 0DTE ETFs, and single stock ETFs grow in 2025H2.

In the U.S., focus has been on when the SEC will approve ETF share classes and spot crypto ETFs (except Bitcoin and Ether). Once approved, ETF share classes may become the next growth catalyst for the US$11 trillion U.S. ETF industry.