Assets hit $311B on record launches while fee wars and flows reshape the field
Canada's active exchange-traded fund market has more than tripled in size since the end of 2022 with assets reaching $311.1 billion in May 2026, a 54% increase over the prior 12 months.
The category has compounded at roughly 36% annually over the past decade and active strategies now represent 35.7% of total Canadian ETF assets, up sharply from just 2.9% in 2010, as the market continues its shift away from a passive-dominated landscape.
The findings of a new Morningstar Manager Research report also reveal that product development has kept pace with asset growth.
Canada saw a record 208 active ETF launches in 2025, followed by another 124 in the first five months of 2026 alone. Active launches have outpaced passive ones every year since 2018, a run that pushed active funds ahead of passive funds by total count back in 2023. As of May, the market counted 975 active ETFs against 640 passive ones, a roughly 50% gap.
BMO's lead narrows
BMO remains the largest active ETF provider by assets, holding a 14.4% share and 77 funds, but that position has eroded considerably, down from 32% in 2020.
Meanwhile Fidelity, BlackRock and Vanguard have lifted their combined share to 33% from just 13% over the same stretch, largely on the back of demand for their asset-allocation lineups. Other firms have instead built out specialized corners of the market, with Hamilton Capital and Harvest establishing themselves as the leading names in derivative income products.
Much of the recent launch activity has come from derivative income ETFs, which sell covered calls to generate yield, along with single-stock ETFs built on derivatives or leverage.
Ninety-nine of these products launched in 2025, with another 32 arriving in the first five months of 2026. The single-stock segment specifically has been dominated by four issuers: LongPoint has been behind every single-stock leveraged launch, while Harvest, Ninepoint and Purpose have issued all of the single-stock derivative income funds.
In several cases, competing firms rolled out near-identical products within days of each other, including Shopify-linked derivative income ETFs launched by three separate issuers in the same week last August.
Systematic strategies close the fee gap
A newer trend has been the rise of low-cost, rules-based systematic equity ETFs.
Seventeen launched in the first five months of 2026 alone, all from Avantis (via its partnership with CIBC), Mackenzie, Russell Investments and BMO. These strategies carry fees averaging 48% below traditional active products in the same categories, positioning them as credible, cheaper alternatives to both active and passive options. Investor appetite is following: systematic ETFs captured 21.0% of active ETF inflows so far in 2026, up from 14.1% in 2025 and just 8.0% in 2024.
Flows on pace for a new record
Active ETFs pulled in 38.8 billion Canadian dollars in net inflows during the first five months of 2026, putting the category on track to top 2025's record of 67.2 billion dollars, itself more than double the 2024 total. Active discretionary strategies led the way with 23.9 billion dollars in year-to-date inflows, followed by active systematic funds at 8.1 billion dollars and active other strategies at 6.8 billion dollars.
Asset-allocation funds continue to dominate the flow tables. Half of the 20 best-selling active ETFs this year are allocation products, led by all-equity portfolios such as iShares Core Equity ETF and Vanguard All-Equity ETF. The iShares fund remains the single largest active ETF in the country, with more than 18 billion Canadian dollars in assets.
Fee competition among the allocation giants has intensified as well. Vanguard cut its allocation ETF fees to 17 basis points from 22 in November 2025, and BlackRock matched that pricing the following month.
Rounding out the flow leaderboard, TD ranked fourth among providers on the strength of its systematic offerings, while Harvest and Hamilton Capital placed fifth and seventh respectively, driven by continued demand for derivative income products.
For everyday investors, the growth of Canada's active ETF market means more product choice than ever, spanning traditional stock-picking funds, rules-based systematic strategies, and income-focused options using covered calls. But the report notes that fee differences between these approaches can still be significant, making cost comparison an important step before investing.
