ETF Trends from the RBC Capital Markets Trading Floor

ETF flows in the US cracked the $100 billion level once again this month. Equity ETFs added $70 billion, which is the highest level of monthly inflows to equities in 2025. Retail king Vanguard S&P 500 ETF (VOO) added $12 billion alone in July, highlighting that the retail investor is buying equity exposure in size. VOO has gained $72 billion YTD, which means it added almost a fresh billion dollars on average to the fund every two days.

More institutional and trader-driven equivalent SPY was the third-highest ETF by inflows, adding just over $5 billion this month, so this crowd is also skewed to buy. Outside of S&P 500 exposure, the buying was widespread across equity themes: Growth, International, and Developed Market ETFs, as well as ETFs in sectors like Tech, Financials, Utilities, Dividend factor ETFs and more niche areas like Chinese Tech (KWEB) grew. Even in Fixed Income space, inflows in the asset class were quite varied in nature: + Aggregate Bonds, + Ultra Short Term, + High Yield Corporate Bonds and + Collateralized Loan Obligations (CLOs).

Canadian ETF flows were also very strong this month and were dominated by equities. International was far and away the leader; 50% of all equity flows were international flavour, followed by 30% to Canada and only 20% to US. This is a flip in sentiment… at the start of this year US equities were 75% of inflows while international equities only represented about 20% of all Canadian ETF inflows.

Crypto ETFs have been in the spotlight

US Cryptocurrency ETFs added $12 billion of new assets in July – this is its biggest month of inflows of all-time. It’s easy to understand the hype: the GENIUS bill was tabled to help regulate Stablecoins in the US and the Bitcoin price rallied 10% in July, and Ether is also up 50%. US-listed Ether ETFs pulled in $5.5 billion in July, only just behind Bitcoin ETFs which added $5.8 billion. Ether cryptocurrency market cap is just about 15% of Bitcoin, so it pulled in huge inflows on a relative basis. Of all ~4000 ETFs listed in the US, IBIT had the second most amount of ETF flows in July (+$5.8B) and ETHA had the fifth highest amount of ETF flows ($5.5B).

The Pac-Man of Canadian ETF Flows: All-in-One / Asset Allocation ETFs

There were steady and unrelenting inflows into All-in-One ETFs like XEQT, VEQT, FBAL and FGRO in July. These ETFs are becoming popular with Canadian investors, especially those that are individually managing their investments. Their simplicity, diversification and cost-effectiveness are key selling points. The ETF naming conventions are similar but there are differences between the individual ETFs. For example, FEQT holds 14 different ETFs and has a 3% allocation to Bitcoin, while VEQT is simpler in its approach, holding just 4 equity ETFs. Interestingly, FBAL, a balanced portfolio, still has a 2% Bitcoin allocation.

Growth in Niche Products

Last month we talked about the new launches in the Levered ETFs space, and the fact that Canadian investors are now able to buy 2X and 3X leverage ETFs that are listed here in Canada, instead of having to go cross-border to the U.S. to access this type of ETF. We are seeing rapid growth of single-stock income ETFs and income-oriented ETFs. HHIS – a fund of funds that includes all 15 Harvest single-stock income ETFs launched 6 months ago, had $20 million in the first week, and has grown to north of $700 million of assets, on pace to hit a Billion dollars within 9 months of launching. Nothing else launched in 2025 comes close when it comes to asset gathering. The next closest is a Fidelity Income Fund that has $350 million, so half the size of HHIS, followed by MicroStrategy Enhanced Income ETF (which is actually held in HHIS), which has $300mm.