Record ETF inflows highlight resilience in volatility
ETF leaders Global X and Ninepoint Partners underscore how income and diversification strategies are driving advisor adoption
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THIS YEAR’S tariff-fuelled volatility has not shaken Canadians out of ETFs. It has pulled them in. In the first six months of 2025, investors added a record $54.8 billion to Canadian-listed ETFs, the strongest first half on record and a pace that’s already more than 70 percent of the $76.3 billion gathered in all of 2024, making the January-to-June period the strongest opening stretch on record. Equity ETFs captured the lion’s share, with $27.8 billion in creations, while investors broadened their reach beyond North America to offset uncertainty tied to US president Donald Trump’s tariff brinkmanship.
The numbers underscore a deeper shift: volatility is no longer driving Canadian investors to cash. Instead, they are using ETFs to stay exposed to markets, reposition portfolios, and solve problems ranging from inflation-bitten income to concentration risk.
Karl Cheong, head of ETFs at Ninepoint Partners, calls it a sign of maturity. “This year’s volatility hasn’t pushed Canadians to the sidelines. Rather than retreating, Canadian investors are using ETFs as
“For advisors, ETFs are no longer just investment vehicles, they’re real-time sentiment systems,” says Cheong. “They give advisors an early read on market psychology, helping them anticipate client behaviour and position ahead of the tape. In fixed income and high yield − areas without a centralized pricing source − ETFs often serve as the reference point, with rate hike expectations visible in real time.”
When oil prices spike, energy-focused ETFs often see volume light up within minutes, reflecting investor conviction or concern. In digital assets, ETF flows into Bitcoin and Ether have become a near-instant barometer of the markets.
The Canadian ETF story began with broad, low-cost beta. Products like XIU and early entrants from iShares, Claymore, Global X, and BMO gave investors a cheap way to own the market. That foundation still attracts flows. As McHaney notes, “The bulk of assets and flows still go to those traditional passive low-cost investments.”
If institutions and advisors are using ETFs more surgically, retail investors are driving growth in both scale and visibility. According to Investor Economics, 45 percent of ETF flows now come from DIY investors, up from about 20 percent just five years ago.
McHaney says that surge reflects a broader cultural shift in how Canadians approach investing. “It’s great that investors have chosen the DIY path and want to be involved in their own decisions,” he says. “But with that comes the need to make sure they’re making informed choices.”
Cheong sees the same enthusiasm up close in online forums. “It’s great because they’re educating themselves and creating communities,” he says. On group forum ETF pages, he sees questions posted and answered by thousands of participants, often within minutes. That collective conversation, McHaney notes, is changing the way products are discovered and discussed, and it means advisors increasingly meet clients who arrive with pre-formed views shaped online.
“One of the biggest problems in Canada is income keeping up with the pace of inflation,” Cheong says. Covered call ETFs, which smooth returns and provide monthly distributions, have exploded in popularity. The appeal is straightforward. “Investors are looking for income to replace their current paychecks or to complement retirement income,” Cheong explains. Some funds now even align their distributions with biweekly pay cycles, reinforcing the paycheck replacement role.
On the hedging side, gold has been a standout. Gold is having a record year, with investors using it for systemic risk protection and as a hedge against currency debasement. Advisors are also leaning on real asset ETFs − commodities, infrastructure, and bullion − to build resilience against equity drawdowns.
McHaney stresses that this kind of diversification is critical. That might mean balancing US technology exposure with defence or commodity ETFs, or adding international equities to counter domestic concentration.
Active ETFs are another bridge. Canada already has the highest share of active ETFs globally, a trend that both leaders see accelerating. Fixed income has been the proving ground. “When equity volatility is caused by bond volatility, the traditional diversification element goes away,” McHaney explains. “That’s where active has really shined, navigating complexity and finding value across sub-sectors.”
For Cheong, the through-line is purpose. “ETFs have moved from the periphery to the portfolio core,” he says. “The next wave is solution-oriented − products that deliver retirement income, downside protection, and tax-efficient growth.”
Global X Investments Canada Inc. is an innovative financial services company and offers one of the largest suites of exchange traded funds in Canada. The Global X Fund family includes a broadly diversified range of solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. Global X has more than $44 billion of assets under management and 150 ETFs listed on major Canadian stock exchanges. Global X is a wholly-owned subsidiary of the Mirae Asset Financial Group, which manages more than $800 billion of assets across 19 countries and global markets around the world.
But the democratization comes with risks. Whenever you see retail participation rising like this, the natural concern is misuse. Leveraged and inverse ETFs can be effective for intraday trading, but they can punish long-term holders. “My worry,” says Cheong, “Is that these investors don’t know what they’re buying. They might just look at the ticker name and make a decision like that.”
McHaney stresses that this is where advisors and issuers must step in. “From an issuer perspective, it’s incumbent on us to meet those investors wherever they show up − whether that’s social media or otherwise − and provide the content to help them make informed choices,” he says. “And for advisors, it’s an opportunity to deepen the relationship by clarifying how certain products work and what trade-offs they involve.” McHaney favours industry-led education rather than mandatory courses.
“ETFs are used by everyone from retail investors to hedge funds and capital-markets desks, they better reflect what’s happening across the market. Flows and intraday pricing give you daily sentiment − and in volatile markets, that immediacy matters”
Chris McHaney,
Global X
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Advisors have long relied on mutual fund data to assess investor behaviour, but that information often lags by weeks. ETFs, by contrast, offer daily flows and intraday pricing, providing a window into how investors are positioning.
McHaney finds that this immediacy has become one of the most valuable features of the structure. “ETFs are used by everyone from retail investors to hedge funds and capital-markets desks. They better reflect what’s happening across the market,” he says. “Flows and intraday pricing give you daily sentiment − and in volatile markets, that immediacy matters.”
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Canadian ETF assets surpassed $600 billion this year, a major milestone. But in relative terms, the industry is still early. Mutual funds remain at roughly $2 trillion. The next stage, according to both McHaney and Cheong, will be less about proof of concept and more about innovation and integration.
Innovation means designing products around real client problems: generating after-tax income in retirement, providing volatility-conscious equity exposure, and offering access to alternatives in a world where the classic 60/40 balance no longer hedges as cleanly. “Advisors are increasingly looking for ways to generate after-tax income or to add exposure to parts of the market that behave differently when volatility spikes,” McHaney notes. “ETFs are being built to meet those needs directly.”
“This year’s volatility hasn’t pushed Canadians to the sidelines. Rather than retreating, Canadian investors are using ETFs as their tool of choice to navigate volatility. This is evidence that ETFs are now a durable, core pillar of portfolio construction”
Karl Cheong,
Ninepoint Partners
their tool of choice to navigate volatility. This is evidence that ETFs are now a durable, core pillar of portfolio construction,” Cheong says.
Global X’s head of investment management and strategy, Chris McHaney, says the resilience speaks to a shift in investor behaviour: “It shows the level of education and sophistication from Canadian investors has gone up over time. In times of stress and market volatility, that actually creates opportunity rather than people running for the hills.”
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From beta to problem-solving
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Chris McHaney
Global X
Karl Cheong
Ninepoint Partners
Karl Cheong is a veteran ETF leader with over 20 years of experience advancing innovation and asset growth in Canada’s investment landscape. As head of ETFs at Ninepoint Partners, Cheong is responsible for setting the strategic direction of the firm’s ETF platform − driving product development, positioning, and growth.
He has shared insights on investment trends through appearances on BNN Bloomberg and in publications such as The Financial Post, The Globe and Mail, and Morningstar. Wealth Professional named him an “Industry Icon” for his contributions to the ETF space. Karl is a CFA® charterholder and is fluent in English and French.
Ninepoint Partners
Karl Cheong
Chris McHaney is the executive vice president, head of investment management and strategy at Global X Investments Canada Inc. An experienced investment professional with a deep understanding of the ETF industry and ecosystem in Canada, McHaney has more than 20 years of experience covering portfolio management, investment strategy and policy, product development, and sales. Prior to joining Global X, he served as BMO Global Asset Management’s director, portfolio manager, where he oversaw the management of both passive and active strategies, derivative overlays, foreign exchange exposures, and cross-asset portfolios. McHaney holds an honours business administration degree from York University’s Schulich School of Business and is a CFA charterholder.
Global X
Chris McHaney
Guardrails for a DIY generation
Published October 30, 2025
Ninepoint Partners is an independent, employee-owned firm serving the investment advisor and institutional investor communities. With over $7 billion in assets and institutional contracts and over 90 employees, we are among the largest independent asset management firms in Canada. Ninepoint Partners manages innovative investment solutions that offer investors the benefits of better diversification. We target investment strategies that are uncorrelated to traditional asset classes, such as equities and bonds, with the goal of lowering overall portfolio risk.
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Looking ahead: innovation and integration
For advisors, the takeaway is twofold. First, understand that clients’ knowledge base is now being shaped in real time outside traditional channels and that this requires more proactive conversations. Second, reinforce the guardrails. Covered call ETFs trade income for upside. Defensive ETFs sacrifice some growth for lower drawdowns. Leveraged ETFs magnify both gains and losses. Short, plain explanations of those trade-offs are often enough to harness ETFs responsibly.
Cheong agrees, adding that integration is already underway in other markets. “In the US, advisors are already constructing full retirement income solutions with ETFs at the foundation,” he notes. Cheong expects Canada to follow quickly, with discretionary models and fee-based practices relying more heavily on ETFs to lower costs and add precision.
McHaney also points out that multi-asset balanced strategies remain a massive pool of mutual fund assets ripe for migration into the ETF wrapper. “As those assets move, you’ll see continued growth,” he says, pointing to more innovation in option overlays that protect downside while retaining equity exposure.
For advisors, the message is pragmatic. Volatility is structural, not temporary. Trade disputes, inflation shocks, and geopolitical friction are likely to remain part of the backdrop. ETFs cannot eliminate that risk, but they can help manage it.
Cheong points to the flexibility of ETFs, whether the focus is on
This article has been paid for in part by Global X Investments Canada Inc.
Commissions, management fees and expenses all may be associated with an investment in products (the "Global X Funds") managed by Global X Investments Canada Inc. The Global X Funds are not guaranteed, their values change frequently and past performance may not be repeated. The prospectus contains important detailed information about the Global X Funds. Please read the relevant prospectus before investing.
This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase investment products (the "Global X Funds") managed by Global X Investments Canada Inc. and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. These investments may not be suitable to the circumstances of an investor.
The views/opinions expressed herein are solely those of the author(s) and may not necessarily be the views of Global X Investments Canada Inc. All comments, opinions and views expressed are generally based on information available as of the date of publication and should not be considered as advice to purchase or to sell mentioned securities. Before making any investment decision, please consult your investment advisor or advisors.
Global X Investments Canada Inc. (“Global X”) is a wholly-owned subsidiary of Mirae Asset Global Investments Co., Ltd. (“Mirae Asset”), the Korea-based asset management entity of Mirae Asset Financial Group. Global X is a corporation existing under the laws of Canada and is the manager, investment manager and trustee of the Global X Funds.
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Ninepoint Partners LP: The ETFs do not have a fixed distribution amount. The amount of monthly distributions may fluctuate monthly, quarterly or annually, as applicable, and there can be no assurance that the ETFs will make any distribution in any particular period or periods. The amount of ordinary cash distributions, if any, will be based on the Manager’s assessment of the prevailing market conditions. The amount of distributions may vary if there are changes in any of the factors that affect the net cash flow on the portfolio of an ETF, including the amount of leverage employed by the ETFs. The amount and date of any ordinary cash distributions of the ETFs will be announced in advance by issuance of a press release. Subject to compliance with the investment objectives of the ETFs, the Manager may, in its complete discretion, change the frequency of these distributions and any such change will be announced by press release. Each ETF intends to pay monthly distributions based on its ability to generate monthly cash flows from writing covered call options and any dividends received on the Portfolio Securities held in such ETF’s portfolio, as applicable. The Manager will review the level of distributions for each ETF on a quarterly basis to consider the sustainability of such distributions.
Ninepoint Partners LP is the investment manager to the Ninepoint HighShares ETFs (collectively, the “Funds”).
Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Funds may be lawfully sold in their jurisdiction.
The Fund is generally exposed to the following risks: absence of an active market for ETF Shares risk; borrowing risk; capital gains risk; collateral risk; concentration risk; covered call strategy risk; cybersecurity risk; derivatives risk; energy risk; equity investment risk; exchange risk; mutual fund corporation risk; fund of funds investment risk; halted trading of ETF shares risk; inflation risk; interest rate risk; large capitalization issuer risk; leverage risk; market risk; no ownership risk; passive Canadian public issuer investment risk; performance risk; regulatory risk; risks associated with an investment in a Canadian public issuer; specific issuer risk; tax risk; trading price of ETF shares risk.
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But the real growth story is now elsewhere. Investors and advisors are increasingly using ETFs as precision tools. Both McHaney and Cheong point to two main fronts: income and hedging.
McHaney takes the long view. The decade of zero interest rates is gone. “We’re kind of in a new economic regime,” he says. “You can’t go by what worked the last 10 years. It’s probably more like what worked 20 years before that is going to work again.”
The record inflows of 2025 are more than a headline. They mark a turning point in how Canadians use ETFs. What began as a low-cost way to own the market has become a flexible set of tools for managing volatility, generating income, and diversifying portfolios.
For advisors, the opportunity is to turn that flexibility into durable strategies, helping clients stay invested through market swings rather than retreating to cash. The choice is broad, the data is live, and the framework is clear. The task now is to apply it with discipline.
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