Active management drives big ETF numbers in H1

It’s been a month of big numbers for Canada’s exchange-traded fund industry. According to a report from National Bank Financial Inc., inflows for the first half of the year topped $100-billion, a new record. Last year, when inflows blew away the previous annual high for a total of $125.4-billion, the $100-billion mark wasn’t reached until November. Canada is also on pace for a record year of launches, with 201 so far, and roughly 80 per cent of those new products are actively managed. A separate report this week from Morningstar Research Inc. looked at the growth of actively managed ETFs in Canada, which outnumber passive funds by roughly 50 per cent (as of May 31). Assets in active ETFs now account for more than 35 per cent of total Canadian ETF AUM, and passive funds’ lead is shrinking. Active ETFs saw inflows of $38.8-billion in the first five months of 2026, according to Morningstar, on track to surpass last year’s record. Equities are still the largest segment of active ETFs, but the Morningstar report points to growth in allocation, money market and liquid alternative funds. We reported a couple of weeks ago that the combination of booming inflows and rising markets pushed gross AUM in Canadian ETFs past $1-trillion. (Gross or unadjusted AUM includes Canadian ETFs’ holdings of other Canadian ETFs.) But while $1-trillion sounds like a big number, U.S. investors managed to pour more than that into ETFs in the first half of this year alone, according to National Bank Financial. Manufacturers have also launched more than 700 new products in the U.S. in 2026. The sheer size of the U.S. market, combined with certain tax advantages and savvier Canadian investors willing to buy U.S.-listed ETFs, has some in Canada worried about investing dollars flowing out of the country and into new U.S.-listed ETF share class products.