Investors poured record-breaking amounts into Canadian ETFs in March: National Bank #CanadaFinance

Flows of money into Canadian exchange-traded funds (ETFs) in March shattered previous monthly records, according to new data from National Bank of Canada Financial Markets, with investors prioritizing assets likely to better withstand a trade war.

Inflows for March totalled $13.5 billion, 28 per cent higher than the previous record of $10.6 billion, set last December. A National Bank report on the data, published Wednesday, says all asset classes saw positive inflows, noting trends into funds that might offer lower risk in the tariff era.

“Investors are digging positions for a trade war by sending assets overseas and seeking low-[volatility] exposures,” the report said.

Inflows into fixed-income funds totalled $6.3 billion, equity funds saw inflows of $5.9 billion, and commodity funds — mainly gold bullion ETFs — had inflows of $165 million. Within the equity grouping, inflows to U.S. equity funds were positive but lower than any other major equity ETF category.

“International equity ETFs saw a sudden $3.8 billion explosion in demand as investors flocked overseas to sidestep a potentially damaging trade war instigated by the U.S. president’s tariff announcements early in the year,” the report said.

“While this trend existed on a smaller scale for the past few months, it was driven by new desire to diversify away from the potentially overvalued U.S. equity market as its two-year bull run meets a correction.”

National Bank observes some large block investments in international equity index funds offered by TD Bank (TPE), Desjardins (DMEI), BMO (ZEA) and iShares (XEF), “hinting at deeper institutional demand and model repositioning.”

The year-to-date numbers tell a similar story, with slightly more inflows into equity funds ($14.3 billion) than fixed income ($13.2 billion), and investors showing a preference for international equity over U.S.

Although international equities have tended to broadly underperform U.S. equities in recent years, the report points out that “year-to-date, broad developed markets (and emerging markets) have eked out positive returns in 2025 so far, finally outperforming U.S. large, mid, and small-cap indices by wide margins.”

Last month saw the launch of 24 new Canadian ETFs, National Bank says, noting that “leverage is a common strategy” among the new funds. “Target date bond, single factor, and covered call ETFs were also launched.”

John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf.

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