ETF Trends from the RBC Capital Markets Trading Floor – March 2026

March 2026 was a challenging month for almost all asset classes. The S&P 500 had its worst month since 2022, gold fell 12 per cent, and bonds also lost value. All told, there were very few places investors could hide and wait for the volatility to pass.

The main culprit, of course, was an escalating conflict in the Middle East, which spiked oil prices and triggered concerns about inflation and slower economic growth across the globe. The VIX, a measure of investor anxiety, jumped to 31.05 before settling back to the 25 level at the end of the month as hopes for resolution, or the so-called TACO (Trump Always Chickens Out) trade emerged. Even the bond market, which typically moves inversely to stocks, also had a difficult month. U.S. Treasury bonds experienced their worst month in over two years. 

The top performing ETFs in March were all related to energy, as the related commodities rallied hard when the Iran war created the biggest-ever disruption to physical oil supplies, trapping millions of barrels in the Persian Gulf.

The United States Oil Fund (USO) which holds front-month WTI crude oil futures contracts rallied 46 per cent.  The most interesting ETF on the top performing list is the Breakwave Tanker Shipping ETF (BWET) which has returned a staggering 411 per cent % year to date and 72 per cent in March alone. The fund holds tanker freight futures on Very Large Crude Carriers (VLCCs), which directly benefited from the massive logistical interruption caused by vessel attacks across the Gulf.

The worst-performing ETFs tell the mirror image of the energy story. Gold and silver mining funds were hit hard as precious metals collapsed from record highs. Every single one of the bottom-10 ETFs from a performance perspective is tied to gold or silver exposure. Silver, the volatile sister to gold, was down 19 per cent in March. But despite the price carnage this month, the physical commodities are still positive this year, as are a lot of the related equities too.

Despite the weak markets, money continued flowing into ETFs. U.S. ETFs pulled in $102 billion in March, this would represent a very average month of fund flows looking across the past 18 months, which is very impressive given the negative returns.  The biggest surprise was the $45 billion that flowed into bond funds – more than went into equity funds. Of that, over $24 billion specifically went into the safest, shortest-term bonds: ultra-short treasuries. This signals "risk-off" behavior when people get nervous.

On the equity side of the equation, investors favored large, established companies over smaller ones, with broad market funds adding $32 billion. Notably, physical gold and silver ETFs saw $11 billion in assets exit the category, reversing inflows from earlier in the year.

Here in Canada, international equity funds remain popular, but investors showed renewed interest in buying the S&P 500 – as the benchmark index moved nearly 5 per cent lower over the course of March. All-in-one ETFs – which hold a mix of stocks, bonds, and other investments – represented 14 per cent of Canadian ETF inflows in March, up from their typical 10 per cent, as volatile markets continued to drive investors toward simplicity.