Global stocks sold off sharply last week, pushing ETF investors into defensive positions as debate builds around 24/7 trading and tokenization in Canada
A sharp pullback in global equities last week sent investors into defensive exchange-traded fund (ETF) positions, with U.S.-listed ETFs absorbing US$54.1 billion in net inflows for the week ending November 6, 2026 - even as a leading industry conference signalled that the market infrastructure behind those trades is about to change in fundamental ways.
The data, published by TD Securities and sourced from Bloomberg, showed U.S. ETF average daily turnover reaching $370 billion for the week - 125 per cent of the average daily turnover over the prior year. Equity ETFs drew $42.0 billion in net inflows, while fixed income ETFs attracted $13.8 billion, as investors rotated away from growth and cyclical exposure in favour of more defensive strategies.
The backdrop was a broad equity retreat. The SPDR S&P 500 ETF Trust fell 2.7 per cent, the Invesco QQQ Trust dropped 5 per cent, and the iShares Russell 2000 ETF declined 2 per cent. Technology, communications, and energy were the hardest-hit sectors, shedding $1.7 billion, $1.3 billion, and $1.2 billion respectively from ETF allocations, according to TD Securities data.
Defensive rotation dominates advisor positioning
Within equity ETFs, large-cap funds led net inflows at $35.4 billion, followed by broad market vehicles at $3.0 billion. Factor ETFs attracted $8.4 billion in net flows, with value, equal-weight, and dividend/income strategies drawing the greatest interest - at $2.9 billion, $2.4 billion, and $2.0 billion respectively. Growth ETFs saw $1.0 billion in outflows.
The Vanguard S&P 500 ETF (VOO) drew the largest single-fund inflow of the week at $17.6 billion. The iShares Core S&P 500 ETF (IVV) and the Invesco QQQ Trust (QQQ) followed with $7.0 billion and $3.6 billion respectively, per TD Securities. The State Street SPDR S&P 500 ETF Trust (SPY) recorded the week's largest outflows at $7.0 billion, while semiconductor-focused products faced significant selling - the iShares Semiconductor ETF (SOXX) shed $3.9 billion, and the Direxion Daily Semiconductor Bear 3X ETF (SOXS) bled outflows equivalent to 165 per cent of its assets under management, according to the same data.
Health care was a notable exception to the broader risk-off tone, drawing $508 million in sector ETF inflows. NVIDIA Corp attracted the largest single-stock inflows through ETF activity at $2.5 billion.
On the fixed income side, government bond ETFs led with $4.0 billion in inflows, followed by municipals at $2.6 billion. Corporate high yield ETFs recorded their third-largest weekly inflows of the past year, led by the iShares Broad USD High Yield Corporate Bond ETF (USHY) and the iShares iBoxx USD High Yield Corporate Bond ETF (HYG), which attracted $701 million and $602 million respectively, all per TD Securities.
Canadian and U.S. ETF markets diverged in October on rate and flow trends, with the Canadian market's own defensive tilt reinforcing the broader pattern seen south of the border.
What 24/7 trading means for Canadian advisors
Even as the week's selloff played out, the 27th TD Portfolio Management & Market Structure Conference - held the same week - raised a pointed question for the advisory industry: how should advisors think about ETF liquidity when markets may soon never close?
Grant Vingoe, Chief Executive Officer of the Ontario Securities Commission, speaking at the conference, indicated that Canada is likely to take a measured approach to 24/7 trading, citing concerns around overnight liquidity, price discovery, market infrastructure, and retail investor behaviour. He noted that Canada does not need to follow every U.S. regulatory development, particularly where differences in market structure justify a distinct approach.
For ETFs specifically, Vingoe flagged that longer trading hours raise important questions around fair value when an ETF continues to trade but its underlying market is closed. Conference notes summarising the panel discussions were published by TD Securities and do not reflect the views of TD Securities.
The practical implications for advisors are real. Highly liquid ETFs - those tracking major broad-market indices, with deep futures markets - are likely to be better positioned for extended-hours trading, because market makers can continue to price and hedge exposure even when the underlying cash equity market is closed.
International equity, fixed income, and more niche ETFs face a different reality: their underlying securities may be closed or less liquid overnight, potentially widening bid-ask spreads and thinning depth outside regular trading hours, according to TD Securities' analysis of the conference.
Adding to the near-term context, Nasdaq in the United States is scheduled to introduce an overnight session from 9 p.m. to 4 a.m. ET beginning December 6, 2026, enabling trading 23 hours a day, five days a week.
Jamie Selway, Director of Trading and Markets at the Securities and Exchange Commission, speaking at the same conference, noted that longer hours improve access but carry real costs across staffing, technology, and risk management. For Canadian advisors managing cross-border or globally diversified ETF portfolios, those dynamics are directly relevant.
Tokenization and what it means for portfolio access
A second structural theme at the conference was tokenization - the representation of ETF shares as digital tokens on a blockchain. For Canadian advisors, the key takeaway is that tokenization is unlikely to displace the ETF wrapper. Instead, it could extend how ETF shares are held, traded, and distributed - enabling holdings through digital wallets and crypto-style platforms alongside conventional brokerage accounts, potentially broadening access and reducing settlement friction.
The OSC and the Canadian Securities Administrators have already signalled openness to controlled experimentation. In March 2026, the OSC, the Autorité des marchés financiers, and the Canadian Investment Regulatory Organization approved the first-of-its-kind financial services platform test in Canada, inviting stakeholder proposals on tokenisation initiatives that leverage regulatory testing environments, according to the regulators.
Canadian ETF inflows hit $137.9 billion year-to-date as the market topped $920 billion earlier this autumn, with TD Securities noting that defensive, income-focused strategies are gaining favour should market conditions deteriorate further.
At the market level, total U.S. ETF assets reached approximately $16 trillion as of November 6, 2026, with year-to-date fund flows of $1.79 trillion, according to TD Securities. The U.S. market now spans 5,717 funds across 448 providers. Fourteen new ETFs launched in the week of November 10, 2026 alone, underscoring the pace at which the product landscape continues to expand.
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