What are we looking for?
Canadian‑domiciled global ETFs that emphasize non‑U.S. exposure.
The Screen
For much of the past decade, geography felt almost irrelevant to portfolio construction. Persistent U.S. market leadership rewarded Canadian investors who concentrated capital south of the border. As a result, many ended up holding portfolios that were labelled as global, yet were in fact geographically narrow.
That dynamic is increasingly being reconsidered. Investors have begun to pay closer attention to how their portfolios are distributed across regions, rather than assuming that global exposure alone delivers meaningful diversification. This reflects a growing recognition that geography – not just asset mix – plays a role in shaping long‑term portfolio outcomes. Valuation differences across regions have contributed to this reassessment.
Many large-cap U.S. equities continue to command a premium relative to many international markets, while portions of the developed world outside the United States and select emerging markets trade at more modest levels. While valuation alone is not a timing signal, it does influence long‑term expectations and reinforces the case for spreading exposure more evenly across markets.
Geopolitics and policy uncertainty add another layer to the discussion. Trade tensions, regional conflicts, and differing fiscal and regulatory priorities underscore that economic risks rarely surface uniformly across countries. Rather than attempting to predict which region will lead next, many investors are choosing to reduce reliance on any single market to drive returns.
This issue is particularly relevant for Canadian portfolios. Investors often carry a natural bias toward domestic assets, and when that is combined with U.S.‑heavy global strategies, portfolios can become more concentrated than intended. In that context, diversification is less about avoiding the U.S. altogether and more about restoring balance across regions. This said, globally mandated ETFs offer a reasonable solution. These strategies retain the flexibility to invest anywhere in the world, including the U.S., while allowing portfolio construction to evolve as relative opportunities shift. The objective is not to make a directional call on regions, but to ensure that portfolios are not too dependent on a narrow set of markets.
With this backdrop, I used Morningstar Direct to screen for actively managed Canadian‑domiciled ETFs that follow a global mandate (includes balanced funds, pure stock or bond funds, and infrastructure funds), meaning they can allocate capital across global markets without geographic constraints.
More specifically I screened for those that hold a 4 or 5‑Star Morningstar Rating for Funds, or a Gold Morningstar Medalist Rating, reflecting Morningstar’s highest thresholds for historical performance or forward‑looking conviction. The former rating is based on historical after-fee risk-adjusted returns as compared to the category average, while the latter stems from our analysts forward-looking view of the funds’ ability to outperform peers. I then put an additional screen on the assets, limiting those with exposures to U.S. equities and U.S. bonds to less than half of the portfolio (noting that the plethora of qualifying funds had more exposure to U.S.-assets).
What We Found
The qualifying funds based on the above criteria are listed in the table accompanying this article alongside tickers, management expense ratios, trailing returns, and asset allocations relative to the US market. Readers are urged to note the category to which each fund belongs, as Morningstar’s ratings are relative to these industry-standard categories. This article does not constitute financial advice, investors are encouraged to conduct their own independent research before buying or selling any ETF listed here.
Ian Tam, CFA, is director of investment research for Morningstar Canada.