Record assets, renewed inflows
Both mutual funds and ETFs reached all-time highs in assets under management in 2025. Mutual fund assets rose to $2.53 trillion, increasing 12.7% year over year. ETF assets climbed to $713 billion, up 37.8%.
Sales activity reinforced those asset gains. Mutual fund net sales totalled $40.5 billion — more than double the 2024 level and marking a decisive shift from the redemptions seen earlier in the decade. ETFs saw $125.8 billion in net inflows — the first-time annual ETF sales exceeded $100 billion in Canada.
These results reflect both market conditions and investor behaviour. Equity markets were strong, with the S&P/TSX composite index rising 28.2% in 2025. At the same time, declining interest rates reduced the relative appeal of GICs and other fixed-term deposits, encouraging investors to move back to market-based investments.
The composition of flows in 2025 is as informative as the totals. Among mutual funds, bond funds really drove net sales, supported by easing monetary policy and better fixed-income performance. Money market funds continued to see inflows, while balanced funds returned to modestly positive territory after several years of redemptions. Equity mutual funds saw net outflows, although equity exposure remains significant through balanced and asset-allocation products.
ETF flows were broad-based across all asset classes, with equity ETFs dominating. Notably, active ETFs now account for half of all ETF net sales, underscoring a structural shift in how investors are combining active management with the ETF vehicle.
Alternative investment fund sales also stood out, with 2025 being the strongest year on record, across both mutual funds and ETFs, reflecting continued demand for diversification within a regulated framework.
A more complete picture
This year’s report positions fund activity alongside developments in Canada’s capital markets for the first time.
Total market capitalization across Canadian stock exchanges exceeded $6.5 trillion in 2025, driven largely by valuation gains rather than new listings. Initial public offering activity was subdued, continuing a trend of fewer companies accessing public equity markets. Excluding ETFs, closed-end funds, special-purpose acquisition companies and capital pool companies, there were only five new listings on the TSX and the TSX Venture Exchange combined in each of 2024 and 2025.
On the fixed-income side, outstanding Canadian debt securities continued to expand, reaching over $6 trillion. That reflects the importance of debt markets in financing government and corporate activity.
The 2025 numbers paint a picture of a resilient investment funds industry that is successfully adapting to changing investor needs and preferences, whether through the adoption of active ETFs or through alternative fund opportunities. However, the health of this sector remains connected to the health of the broader capital markets.
The primary market for new equity listings remains a concern. A vibrant ecosystem requires not just healthy investment funds to allocate capital, but a diverse and growing pipeline of public companies to receive it.
While Canadian investors are well diversified geographically, with substantial U.S. and international allocations, renewed attention on capital formation remains important as we move through 2026.
Many industry and government leaders are articulating the right objectives. The challenge will be translating those intentions into measurable outcomes that ensure Canadian markets remain a dynamic engine for long-term economic growth and provide competitive investment opportunities for investors.
Ian Bragg is vice-president of research and statistics at the Securities and Investment Management Association.