ETF markets in Canada and the U.S. posted record inflows and trading activity in 2025, but the bigger story was how investors adjusted exposure as volatility and policy uncertainty emerged. Instead of a classic flight to safety, flows reflected diversification, rotation and growing comfort with newer ETF structures.
BNN Bloomberg spoke with Mike Philbrick, CEO at Resolve Asset Management, about how innovation, digital-asset adoption and a shift away from narrow U.S. mega-cap leadership reshaped ETF demand in 2025 and what those trends could mean heading into 2026.
Key Takeaways
- ETF inflows and trading volumes reached all-time highs in Canada and the U.S. in 2025, reinforcing ETFs as a dominant investment vehicle.
- Investor behaviour shifted away from traditional risk-off positioning, with flows rotating toward international equities, real assets and diversification rather than bonds.
- Product innovation accelerated, driving demand for option-income strategies, leverage and inverse ETFs, and simple asset-allocation products.
- Digital-asset ETFs gained broader acceptance as clearer regulation and expanded platform access supported bitcoin and ether exposure through regulated wrappers.
- Looking ahead to 2026, ETF positioning may benefit from broader market leadership beyond U.S. mega caps, particularly across infrastructure, materials and other real-economy AI beneficiaries.
Read the full transcript below:
ANDREW: We’re joined now by a longtime observer of the ETF market, Mike Philbrick, CEO of Resolve Asset Management. Mike, it’s great to see you. We’ve been hearing this week about enormous inflows into the ETF market in both the U.S. and Canada. The Wall Street Journal has a headline today: “ETFs are eating the world.” They’re so popular they’re eclipsing mutual funds, certainly in terms of growth. In fact, money has been coming out of mutual funds. What has interested you about these flows?
MIKE: Well, it’s been interesting. 2025 was certainly the year of momentum meeting Main Street for the ETF world — low fees, endless choices. You know, $125 billion in inflows, $1.2 trillion in trading in Canada. It’s been a blockbuster year, and I think this year has also been a year of innovation and rotation.
ANDREW: Right. What, in particular, have we seen in terms of rotation?
MIKE: What was interesting, right — so if we take a trip in the time capsule back to April 2025, we saw the tariff tantrums really cause a lot of market consternation. And during that period, rather than seeing a rotation from stocks into, let’s say, safe assets like bonds, what we saw instead was a rotation away from U.S. market dominance toward international stocks.
The Canadian market, for example, outpaced the U.S. market. We saw moves into precious metals. We saw continued development in the digital-asset space. So we saw that broadening of the rally, away from technology and into things that are going to be needed to support growth in the AI space.
ANDREW: We’ve seen so many innovations — option income, leverage, inverse, crypto assets — but we’ve also seen what you say is strong demand for simple asset-allocation ETFs as a one-ticket solution. Is that, for example, ETFs that invest in both stocks and bonds?
MIKE: It’s actually across the board. Yeah, one factor that was pretty interesting in 2025 is that investors were looking for that single-ticket option in more of the core drawer rather than the explore drawer.
A lot of stuff was fun and flashy — you talked about some of the levered and covered-writing ETFs — but this fell into the category of, “Hey, just give me one-ticket diversification,” whether it was across asset classes — stocks, bonds, maybe some gold, maybe some bitcoin — or across factors.
One of the ETFs bringing everyone’s attention today is FEQT, the Fidelity All-in-One Equity ETF. This one is really interesting because it spans Canadian stocks, and then momentum, value and quality factors, as well as U.S. and international exposure, with about a three per cent allocation to bitcoin.
So here you have a diversified equity replacement. You’ve got factors covered, geographic regions covered and a small slice of digital assets. You can almost set it and forget it. That’s been attractive for clients, and it’s nice to see because it’s a strong long-term product for investors.
ANDREW: That’s interesting. One-ticket global equity from Fidelity. Another one that’s caught your eye is PFAA, the Picton Mahoney Fortified Alternative Fund in Canada. What does this one hold?
MIKE: This one is a liquid alternatives multi-strategy fund. It has things like merger arbitrage, long-short equity portfolios and a mix of about five or six different alternative strategies.
These strategies move differently than traditional markets, so what this can do is add stability to a portfolio. If you’re looking at 2026 and saying, “My bonds aren’t what they used to be, and I’m worried about equity risk,” this can add durability without requiring equity beta or a bull market to generate returns.
It also provides a good place to rebalance. When equities run up, you can rebalance into a fund like this. When equities pull back, you have capital to deploy back into stocks.
ANDREW: The Wall Street Journal is a little skeptical about some of these more exotic funds. It says some have unbelievable yields. One that sells covered calls on Tesla touts — and I’m quoting — a 46 per cent distribution rate. However, since 2022, investors have made just 62 per cent in total. So some of these structures don’t work out that well.
MIKE: Correct. I call it “yield porn.” Investors can get mesmerized by headline yield numbers. You always have to look at total return.
If the yield is supposed to be 42 per cent, but the total return is 12 per cent, then your return is 12 per cent — the yield is just a distraction. In some cases, products pay weekly instead of quarterly, which can also be misleading and deleterious to outcomes.
A simple rule of thumb is this: if a fund advertises a 42 per cent yield but only earns 16 per cent, then about 26 per cent of what you received was your own capital coming back.
ANDREW: Just to be clear, if the yield was 42 per cent and you made 12 per cent on the year, you really received about 30 per cent of your own capital back.
MIKE: Exactly. That’s why you always want to compare yield with total return to understand whether you’re earning income or simply getting your own money returned.
ANDREW: ETFs now exceed the number of listed stocks, certainly in the U.S., and likely in Canada as well.
MIKE: Yes, and that’s not new. Back in the 1990s, when mutual funds proliferated, the same thing happened. If you have a universe of a few thousand stocks, you can create an almost infinite number of products — value tilts, quality tilts, covered writing, leverage.
The choice set is huge, which means investors need discipline. Focus on what does the heavy lifting — your core, low-fee exposure — and then use higher-cost, more complex products sparingly around the edges.
ANDREW: What do you think is the next big thing in ETFs?
MIKE: It’s hard to dispute investors’ ongoing demand for yield, so income strategies will continue to play a role. But we’re also seeing growth in portable alpha and return-stacking approaches — taking the beta investors already own and layering diversifiers on top.
I think income products will improve as investors get more sophisticated and providers respond. We’ll likely see better-designed covered-writing and leveraged strategies. And I also think we’ll see more fully baked, one-ticket products that investors can own as a complete solution.
ANDREW: Mike, thank you very much.
MIKE: Always a pleasure.
ANDREW: Mike Philbrick, CEO of Resolve Asset Management.
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This BNN Bloomberg summary and transcript of the Jan. 15, 2026 interview with Mike Philbrick are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
