The story of the multi-trillion-dollar global exchange-traded fund (ETF) industry begins not on Wall Street, but on Bay Street in Toronto. A groundbreaking financial product conceived in Canada thirty-five years ago laid the foundation for an investment revolution that continues to evolve today.
The Toronto Origin of a Global Giant
In 1990, the Toronto Stock Exchange (TSX) launched a transformative investment vehicle. Initially called the Toronto 35 Index Participation Units, or TIPS 35, it allowed investors to purchase a single unit that tracked the performance of the largest companies on the TSE 35 Index. This innovation provided broad market diversification with the simplicity of trading a single stock. That original fund is known today as the iShares S&P/TSX 60 Index ETF.
This Canadian creation set the stage for the explosive growth of ETFs worldwide. It was a defining moment in financial history, proving that accessible, index-tracking investment products could thrive.
BlackRock's Entry and the Path to Dominance
For nearly two decades, the management of this pioneering fund operated independently from the investment behemoth it would eventually help define. The landscape shifted dramatically in 2009 during the global financial crisis's aftermath. BlackRock Inc. executed a monumental US$13.5-billion acquisition of Barclays Global Investors.
Barclays' asset management arm had previously acquired the stewardship of the Canadian-born ETF and developed the globally recognized iShares brand. This single deal catapulted BlackRock from a firm known for active strategies and risk management into the world's largest asset manager and the undisputed leader in the booming ETF sector. It also made BlackRock the steward of the revolutionary product first brought to life by the TSX.
A Dynamic and Innovative Market Today
From its humble beginnings, the Canadian ETF market has matured into one of the planet's most dynamic and innovative. As of September 2025, the total assets under management in Canadian ETFs are closing in on a staggering $700 billion.
Canada continues to be a hotbed of ETF innovation, listing more than 1,700 funds. The country proudly hosts several world-firsts, including the first physical-backed Bitcoin ETFs. Furthermore, the segment of active ETFs is expanding rapidly, now constituting over 30 percent of all Canadian ETF assets. This demonstrates the market's ongoing evolution beyond simple index tracking.
The journey from a novel idea on Bay Street to a cornerstone of global finance underscores Canada's significant and often understated role in financial innovation. The ETF, a Toronto-born concept, has democratized investing for millions and reshaped the asset management industry forever.
