The Canadian equity market offers investors exposure to energy producers at a time of geopolitical risk.Jeff McIntosh/The Canadian Press
Stocks are hitting record highs, with the surge in technology names – powered by investments in artificial intelligence – getting much of the attention.
However, Canadian stocks have also been flourishing, with the S&P/TSX Composite Index quietly hitting a new high. The Canadian index is up around 10 per cent this year.
The gains in Canadian stocks have stoked enthusiasm among advisors. A Fidelity Investments Canada ULC poll of 4,000 financial advisors conducted in early May found that more than 1,700 chose Canadian equities as the top asset class they’re increasing exposure to; advisors also said Canada was the region that offers the most compelling investment opportunity.
Ilan Kolet, institutional portfolio manager at Fidelity, says he wasn’t surprised by those results.
“In our funds, we had been underweight Canada for a long time because of weak productivity, high household leverage and an economy overly dependent on housing and population growth,” he says.
“But by late 2025, our view had become more balanced as Canadian assets looked better discounted and the U.S. looked more expensive, more concentrated and more exposed to policy risk. So, while Canada had not been our preferred market for much of the past decade, it makes sense to me that advisors are becoming more interested now.”
In addition to cheaper valuations, Mr. Kolet says some of the major headwinds that weighed on sentiment are easing. The composition of the Canadian market is another reason for the shift.
“Canada has meaningful exposure to energy and materials, which can be helpful in an environment in which inflation, geopolitical risk and supply shocks are still part of the backdrop,” he says.
John Zechner, chairman of Toronto-based investment manager J. Zechner Associates Inc., says he’s been adding to Canadian holdings and reducing U.S. exposure in the past few months.
“The Iran war has solidified that trend as it has increased the global interest in Canadian energy assets as a safe geopolitical risk investment,” he says.
Mr. Zechner particularly favours domestic oil and gas stocks.
“Canadian energy stocks are undervalued and should start to garner much stronger foreign investor focus due to their long-lived reserves, increasing investments in energy infrastructure and absence of the geopolitical risks seen in so many of the major international energy producers,” he says.
His top names in the sector are Canadian Natural Resources Ltd. CNQ-T, Cenovus Energy Inc. CVE-T and Whitecap Resources Inc. WCP-T.
Mr. Zechner also likes some Canadian technology stocks – Shopify Inc. SHOP-T and Constellation Software Inc. CSU-T are his top picks – for their growth profile and valuations.
Mr. Zechner is also sticking with the gold trade, adding to names such as Barrick Mining Corp. ABX-T, Agnico Eagle Mines Ltd. AEM-T and Torex Gold Resources Inc. TXG-T on weakness in April.
Chris McHaney, head of investment management and strategy at Global X Investments Canada Inc., says the interest in Canadian equities isn’t surprising, as Canadian investors have always had a strong home-country bias.
“But with geopolitical tensions and the commodity supercycle underway, we’ve seen that demand for ways to invest in Canada’s homegrown companies trend upward,” he says.
Mr. McHaney says Canadian equity exchange-traded funds have seen some of the highest flows in the industry over the past year. In the first four months of 2026, almost $13.5-billion has flowed into Canadian equity ETFs, according to National Bank Financial Inc. That compares to $11.3-billion for U.S. equity funds and $22.8-billion for international ETFs.
He points to opportunities for investors in commodities and energy.
“Canadians are increasingly aware of this and are looking to ‘get in early’ to the role that Canada can play as a reliable exporter of energy and metals, today and into the future,” he says.
“It’s not just Canadians who are taking notice – global investors are looking at Canada as a politically stable country that’s open for business and that has many of the resources the world’s economy is looking for.”
To address that demand, Global X Canada launched seven new commodity ETFs last month, including Global X All-In-One Commodity Producers Equity ETF COMX-T and Global X Silver Miners Index ETF SLVX-T, as well as covered-call versions of the funds.