Investors Pour CAD16B into Single-Country ETFs; Japan Leads

TD Securities’ Canadian ETF Weekly report shows investors have placed CAD 16 billion year-to-date into U.S.-listed single-country exchange-traded funds, compared with CAD 7 billion that flowed into single-country ETFs over the entire 2025 calendar year. Japan attracted CAD 7.2 billion, South Korea CAD 3.7 billion and Taiwan CAD 1.1 billion.

The report says the bulk of the activity is centred in the large U.S.-listed product universe. Canada’s domestic single-country ETF market is smaller and has expanded more slowly than the U.S. market.

Japan’s inflows were linked in the report to corporate governance reforms, rising return on equity and increased institutional interest. South Korea and Taiwan drew capital tied to their roles in artificial intelligence development and the global semiconductor supply chain.

Brazil recorded CAD 3.0 billion of inflows, with investors citing expectations of stronger commodity demand and potential easing of domestic monetary policy. Canada-focused single-country ETFs attracted about CAD 1.7 billion from international investors.

Despite country-specific flows, broad Canadian equity ETFs recorded CAD 17 billion in year-to-date net inflows across 238 funds. Broad-market Canadian products account for CAD 71 billion of the country’s CAD 183 billion in Canadian equity assets under management, the report states.

The report notes that exposure to some markets, notably Taiwan and South Korea, is often obtained through U.S.-listed or regional funds because equivalent Canadian-listed single-country products are limited. When choosing between Canadian-listed and U.S.-listed options, investors compare management fees, liquidity and tracking efficiency.

TD Securities’ report warned that rising allocations to large exporting economies can increase portfolio concentration risk and advised monitoring portfolio drift and potential localized shocks, including geopolitical tensions or currency moves, that could affect returns relative to broader asset-allocation goals.

The data in the report show investors are using single-country ETFs to express specific market views while many continue to hold diversified Canadian equity funds for income and stability.