What’s Driving Canada’s Passive Investing Boom?
Canadian investors are increasingly turning to passive investing as their portfolio foundation of choice. In this episode, special guest Erin Allen and host Zayla Saunders dig into why this trend continues to gain ground, from the evolving DIY investing landscape and the rise of hybrid advice models to the increasing pull of social media on next-gen investors.
Zayla Saunders is Vice President of ETF Online Distribution at BMO Global Asset Management (BMO GAM) and Erin Allen is Director, Direct Distribution at BMO GAM. This episode was recorded live on Monday, August 17, 2026.
ETFs mentioned:
Sources:
SPIVA Canada Year-End 2025 Scorecard
SPIVA Canada Persistence Scorecard: Year-End 2025
KYC: Know Your Client
KYP: Know Your Product
Collateralized Loan Obligation (CLO): A structured financial product where a manager pools together corporate loans and repackages them into tranches, or classes of securities, based on their risk level.
DIY (Do-It-Yourself) Investor: Individual who manages their own investment portfolios directly — typically through an online brokerage platform — rather than working with a financial advisor.
CRM3: Client Relationship Model Phase 3, also known as Total Cost Reporting (TCR), is a Canadian financial regulation built on its predecessor, CRM2, that mandates full transparency around investment fees and costs.
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CLOs are floating- or fixed-rate debt securities issued in different tranches, with varying degrees of risk, by trusts or other special purpose vehicles (“CLO Issuers”) and backed by an underlying portfolio consisting primarily of below investment-grade corporate loans. The BMO AAA CLO ETF pursues its investment objective by investing, under normal circumstances, at least 85% of its net assets in CLOs that, at the time of purchase, are rated AAA or the equivalent by a nationally recognized statistical rating organization. The BMO BBB CLO ETF pursues its investment objective by investing, under normal circumstances, at least 75% of its net assets in CLOs that are BBB-rated at the time of purchase.
AAA herein refers to the order of payments, should there be any defaults, and does not represent the ratings of the underlying loans within the CLO. If there are loan defaults or the CLO Issuer’s collateral otherwise underperforms, scheduled payments to senior tranches take precedence over those of mezzanine tranches (a tranche or tranches subordinated to the senior tranche; e.g., AAA tranches are the most senior, while BBB tranches are mezzanine-level), and scheduled payments to mezzanine tranches take precedence over those to subordinated/equity tranches. The riskiest portion is the “Equity” tranche, which bears the first losses and is expected to bear all or the bulk of defaults from the corporate loans held by the CLO Issuer serves to protect the other, more senior tranches from default.
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