Daniel Straus, managing director at National Bank Financial
FOCUS: ETFs
Top Picks: VIDY TSX, MART TSX, VALT TSX
MARKET OUTLOOK:
Time and again, investors have turned to exchange traded funds (ETFs) during crises to rapidly reposition portfolios or trade tactically, benefiting from their world-class liquidity and broad exposures. The recent tariff turmoil now joins the list of historical moments when ETFs delivered liquidity, access and efficiency to investors seeking to act in fast-moving markets. (See also: the 2020 COVID-19 crash, euro debt zone crisis, taper tantrum, 2008-09 great financial crisis, and many more incidents when ETFs proved their mettle).
The Canadian ETF industry experienced several days of record volume and flows in April. In the first week of April 2025, Canadian ETFs pulled in $4.5 billion, the highest weekly reading in 2025. ETF trading volume also surged to new records — Monday, April 7 marked the highest-volume day in Canadian ETF history with $14.5 billion traded. ETF (versus stock) “market share” of trading also increased during the most volatile days, becoming 20 per cent of all exchange turnover for the first two weeks of April. Year-to-date flows are already $39 billion in Canada, higher than any annual figure from the pre-COVID-19 era.
National Bank’s CIO office adjusted allocations in early April, reducing exposure to U.S. equities relative to developed overseas markets. A potential global rotation may be underway if the U.S. dollar remains under pressure. A shift away from tariffs might sustain optimism in stock markets in the short-term but given current valuations after two years of U.S. bull run dominance, downside vulnerability to trade war disruption is significant. Government bonds have attractive return potential without necessarily requiring a severe economic slowdown. National Bank’s CIO office places overweight on government bonds and maintains a neutral position in gold.
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TOP PICKS:
Vanguard FTSE Developed EX North America High Dividend ETF (VIDY TSX)
National Bank’s economists and strategists have written positively of the European economy’s fundamentals, despite comparatively slower growth. The eurozone’s unemployment level is near its lowest levels in 25 years, and inflation has come off its peak. Japan’s outlook should also hold steady despite trade uncertainty. This dividend ETF has 20 per cent weight in Japan 60 per cent in western Europe, offering low-cost diversified exposure with a dividend theme that further bolsters the defensive nature of this position.
Global X Equal Weight Canadian Groceries & Staples Index ETF (MART TSX)
In this world of trade and tariff disputes, many Canadian investors might be interested in “buying Canada” not just in their consumption decisions, but also in their investments. This ETF from Global X (formerly Horizons) is part of their “best of Canada” series offering highly concentrated exposure to lesser-served parts of the Canadian sector investment landscape. MART holds just five grocery and consumer staples companies, and our research has shown that the underlying revenue isn’t as “export dependent” as other sectors such as technology or even energy. MART’s MER of 0.25 per cent will also be waived to zero until the end of 2025.
CI Gold Bullion Fund Currency-hedged (VALT TSX)
Recent events have re-surfaced the importance of uncorrelated strategies. We felt this in 2022, when inflation and rate-hiking caused traditional balanced portfolios to experience their worst performance in 100 years—and also recently, in early April when stocks and bonds fell together. Gold may be a dumb yellow metal that just “sits there” but you can’t argue with its millennia-old history as a store of wealth. This ETF stores gold in London and applies a currency hedge so that if the U.S. dollar tumbles relative to the Canadian dollar, you won’t feel that loss (but the FX-hedging could work the other way, for which there is VALT.B).
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| VIDY TSX | N | N | N |
| MART TSX | N | N | N |
| VALT TSX | N | N | N |
PAST PICKS: April 5, 2024
Dynamic Active Preferred Shares ETF (DXP TSX)
- Then: $21.23
- Now: $23.19
- Return: 9%
- Total Return: 15%
Global X Enhanced All-Equity Asset Allocation ETF CAD (HEQL TSX)
- Then: $23.88
- Now: $26.52
- Return: 11%
- Total Return: 13%
CI Money Market ETF (CMNY TSX)
- Then: $50.11
- Now: $50.09
- Return: -0.3%
- Total Return: 4%
Total Return Average: 11%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| DXP TSX | N | N | N |
| HEQL TSX | N | N | N |
| CMNY TSX | N | N | N |
