What are we looking for?
Well rated, Canadian-listed actively managed bond ETFs.
The screen
Canadians seem to have a bit of a thing for active management. Whether that reflects our resource-heavy stock market or a distribution system built around actively managed mutual funds, the result is the same: Despite plenty of low-cost passive options, most Canadian investment-fund assets remain actively managed.
That love affair has spilled into our booming ETF market. From 2017 through to last month, 1,333 unique ETFs were launched in Canada (counting each fund once rather than every currency or share-class variation). Of those, 904 – nearly 68 per cent – were actively managed. In 2025 alone, 208 of 290 launches were active; so far in 2026, active launches have outnumbered passive ones by almost five to one.
From market correction to record highs, what should investors focus on now?
Has active management actually paid off in the Canadian ETF space? To find out, I compared the percentage of active and passive equity and fixed-income ETFs that beat their Morningstar category medians over trailing one-, three-, five- and 10-year periods. I also measured how often each group reached the top quartile.
The results were sharply divided. History tells us that Canadian-domiciled active stock ETFs were roughly 15 to 21 percentage points less likely than passive ETFs to beat their category medians and less likely to reach the top quartile in all 4 periods observed.
Active bond ETFs told almost the opposite story. They beat their category medians more frequently than their passive counterparts across all four periods, by approximately 15 to 22 percentage points, and posted better top-quartile success rates throughout.
Active management, it seems, has historically earned its keep more consistently in bonds than stocks. Still, these results are directional: Fewer ETFs have long histories, and category-relative performance does not show whether a particular fund suits an investor’s portfolio.
With this in mind, I used Morningstar Direct to screen for actively managed fixed-income ETFs with strong records and promising prospects. Funds required a four- or five-star Morningstar Rating, reflecting strong past risk-adjusted performance against category peers, and a Gold or Silver Morningstar Medalist Rating, signaling Morningstar’s conviction in their ability to outperform their category average over a full market cycle.
What we found
The ETFs that met the above requirements are listed in the table accompanying this article inclusive of ticker, fees, trailing returns and Morningstar Ratings. Investors are urged to first look at the category to which each ETF belongs, as these industry-standard categories are the basis of Morningstar’s rating system. I also note importantly that these categories house both ETFs and Mutual funds
This article does not constitute financial advice. Readers are encouraged to conduct their own research before buying or selling any of the funds or ETFs listed here.
Ian Tam, CFA, is director of investment research for Morningstar Canada.