Andrei Bruno, Fidelity Canada's Director of ETFs, says the market moved from pricing less than 100% odds of a rate hike by year-end to "more than 100% probability" after Fed Chair Kevin Warsh's hawkish tone at Jackson Hole.
While clients fret that a market at record highs can't keep climbing, Bruno calls that skepticism "healthy" and is steering them toward value stocks, shorter fixed-income duration and international diversification rather than telling them to get out.
"I would say we remain cautiously optimistic with equity markets."
Bruno runs Fidelity Canada's ETF business, overseeing a factor lineup built by an in-house quantitative research team of more than 200 technologists, researchers and PhDs — a capability, he says, that Fidelity has run since the 1960s.
I listened to the full interview so you can skip it. 30 minutes of audio, 9 minutes of reading.
Here are the 11 takeaways that matter.
👤 Guest: Andrei Bruno, Director of ETFs at Fidelity Investments Canada
🎙️ Host: Agnes Doherty
📰 Published: 9 September 2026 on YouTube · recorded 31 August 2026
🔴 YouTube | 🟢 Spotify | ⏱️ 30 min | ✅ Time saved: 20 min
Key Takeaways
Markets moved from pricing less than even odds of a rate hike to "more than 100% probability" by year-end after Jackson Hole
The shift came because Warsh said the Fed is "squarely focused" on inflation over employment
The yield curve bear-flattened on the hawkish tone, and Bruno is telling clients to shorten duration
Short rates rose faster than long rates as hike odds firmed up front
Credit spreads are "incredibly tight" across investment grade, high yield and leveraged loans
He compares buying credit today to "investing at the top" in equities
Inflation largely hinges on the Iran conflict, which he says has sent oil prices "yo-yoing all year"
He still sees a rate hike as "a risk that is on the table," even as February base effects could let the Fed "run out the clock"
Trade friction with the US is a "pretty large risk" to Canada's economy right now
He expects positive Q2 GDP growth after two straight negative quarters
Value and momentum are 2026's top two flow-winning factors, and he calls the US "mid cycle" rather than late cycle
A year ago he called the US late-cycle; most now say mid-cycle, a phase that historically favors value and momentum
Multi-asset "all-in-one" ETFs, including Fidelity's FBAL, now account for three of Canada's ten best-selling ETFs
Canada is on pace for a record ETF year after roughly $122 billion flowed in through July
Industry-wide, about one new ETF has launched per trading day in 2026
The US dollar-debasement trade will keep going given "over $40 trillion" in federal debt, even after a post-Jackson-Hole bounce
1. Warsh's Hawkish Tilt
Host Agnes Doherty opened by asking what stood out from Fed Chair Kevin Warsh's remarks at Jackson Hole the previous week.
Bruno's headline read: the Fed is leaning on one half of its dual mandate. "It was interesting, his statements around what part of that dual mandate that they're focusing on, and they've mentioned that they are squarely focused on the inflation side of the ledger there"
He noted recent non-farm payroll revisions show the labor market "hanging in there," without "massive drop growth across the board" — a data point he thinks deserves more weight than the Fed is giving it
On the Fed's preferred inflation gauge: "If we take a look at PCE, which is kind of the Fed's preferred metric to look at with regards to inflation, it is running well above the 2% target," with core components "continuing to trend higher"
He described a split among voting members — some pushing for more restrictive policy, others comfortable at current levels — and concluded: "there is some possibility we can see higher rates going into year end"
2. Markets Now Price a Hike
Doherty asked what the hawkish tone means for investors positioning fixed income.
"We are ticking up to kind of more of a 50-50 probability for the September [meeting]... more than 100% probability of a hike going into year end," up from "less than a hundred percent probability" before Jackson Hole
He said the yield curve "bear flat[tened]" after the meeting — short-term rates moved up more than longer-term rates — as hike odds repriced at the front end while AI-capex-driven growth and inflation expectations held up the long end
His advice given the setup: "There might be a preference there to look closer to the shorter end of the curve, look at kind of reducing down some of that duration risk in your portfolio," anticipating continued rates volatility
3. Credit Spreads Stay Tight
Doherty asked whether he's surprised credit hasn't been more volatile given where long-term rates sit.
He frames the shift since the pandemic as a change in what drives fixed-income volatility. "Since about 2020, it's been a rates volatility story," while credit spreads "remain incredibly tight" across investment grade, high yield and leveraged loans — with only a brief widening "around the kickoff of the Iran conflict"
"You're kind of investing at the top," he said, drawing the comparison to buying equities at a market high, though he flagged no near-term cracks: "we're not seeing corporate bankruptcies. Corporate balance sheets are good. We don't have a big debt refinancing year coming this year"
His recommendation is to stay diversified across credit buckets, since "if we do see a rough pass somewhere, there certainly is a decent way for credit spreads to wind out"
4. Oil, Iran and Inflation
Asked about oil-driven inflation amid continued Middle East conflict, Bruno tied the inflation outlook directly to the war.
"Certainly there needs to be some sort of resolution within that conflict to get kind of oil prices at more stable levels, because we've had yo-yoing all year" — prices ease on hopes of a ceasefire, then "heats up again" and spike once more
He said the Fed "may have to move at some point" given inflation is "well past their 2% target," but noted base effects from an earlier-year spike roll off around February, which could let the Fed "run out the clock"
On Canada, he expects the Bank of Canada to hold rates for the rest of the year after the country exited "a technical recession"
5. Canada's Growth and Tariffs
With a Bank of Canada rate decision, GDP data and unemployment data all due that week, Doherty asked him to unpack the Canadian picture.
He expects "some positive growth" in Q2 GDP after negative prints in the prior two quarters
"The rhetoric surrounding trade with the United States has amplified in the last couple of weeks," which he called "a pretty large risk to the Canadian economy" given the US remains Canada's largest trading partner
He praised Prime Minister Carney's push to open alternative trade routes as "a great long-term strategy," while cautioning "that takes time" and that absent a resolution with Washington there is "some potential for short-term pain" for Canada
6. Optimistic on Earnings
Asked how he squares record highs with client anxiety, Bruno said the worry itself is a healthy sign.
"It's healthy that people are saying, do I need to re-evaluate, do I need to take a look at the risk, maybe I need diversify a little bit"
He cited Fidelity CIO Andrew Marchese's view that earnings are the best indicator of future stock returns, and said earnings "remains strong" both for AI-related names and the other "450 names in the S&P 500" outside AI
His own stance: "constructively optimistic," with more caution reserved specifically for AI-linked names where clients are looking to "take a few eggs out of that basket" without fully rotating out
7. The Value Trade and FCUV
Doherty asked where investors can find exposure outside the AI trade, and how Fidelity's FCUV value ETF is positioned.
Value and momentum have been 2026's top two performing and most-flowed-into factors year to date
He now places the US in mid cycle, reversing his own call from a year earlier: "Had we gone, you know, talked to me about a year ago, I would have said we're a late cycle here for the US, and most folks right now agree we're back in the mid cycle." Value and momentum have historically led in that phase
He said value appeals partly as a hedge on client trepidation around the momentum/AI trade, since value has historically run as a complement to momentum by correlation
FCUV's construction, in his words: it targets stocks cheap on price-to-book while stripping out unintended size or quality tilts, run by the quantitative indexing team headed by Bobby Barnes, "the architect of all these factor indices"
8. Flows Turn International
A viewer asked how rate shifts affect the ETF landscape; Doherty added a question on where flows are heading.
The biggest shift over roughly the last 18 months has been money moving from US equities into international and Canadian equities, largely for diversification
A caveat on emerging markets: "If we think about the top three largest names in EM indices, they're all AI-related type names. While you are getting some geographical diversification in there, just as a word of warning, you are still getting quite a bit of indexing to AI in there as well"
On the dollar-debasement trade, he said the US dollar has firmed against G10 peers since Jackson Hole, but expects the theme to persist given "it's over $40 trillion of debt there"
Fixed income flows have shifted into cash-like and money-market products as clients cut duration risk — a positioning he shares personally
Multi-asset "all-in-one" ETFs have "been gaining a ton and ton of popularity," with three of Canada's top ten selling ETFs now multi-asset, including Fidelity's own FBAL — one-ticket products offering diversified, automatically rebalanced exposure across active and systematic strategies
9. Financials Look Insulated
Asked which Canadian sectors would prove resilient given the tariff fight, Bruno singled out the sector least directly exposed.
"In terms of direct effects, I'd say financials are a little bit insulated," since most Canadian banks' US business is indirect exposure through the companies they lend to
Miners and materials, by contrast, carry more direct trade exposure
10. A Record Year for ETFs
Doherty cited roughly $122 billion of year-to-date inflows into Canadian ETFs through the end of July and asked where Fidelity ranks.
Bruno said Fidelity has "a couple" products in the top 10 or 15 sellers, naming FEQT, FBAL and FGRO
He confirmed the pace is record-setting: "Last year was the best and we're poised to eclipse that this year as well"
He noted heavy competition industry-wide, with roughly one new ETF launched per trading day in 2026, a similar pace to the year before
11. Fidelity's Quant Engine
Doherty asked him to describe the quantitative research team behind Fidelity's factor and systematic products.
He described a broad "Quantitative Research Investments" group spanning factor investing — what he called "quant 1.0," Bobby Barnes' team — and fully active, model-driven strategies across asset classes
Distinct desks handle different mandates: Krish McCall leads systematic fixed income, and Gil Haddad runs more active equity strategies, alongside Barnes' factor lineup
"There's a number of teams over 200 technologists and researchers and PhDs who are supporting these teams under the hood." Portfolio managers continuously adjust the models
"This isn't new for Fidelity. We've started doing quant investing back in the 60s," he said, calling it a capability that continues to evolve
Bonus Insights
Bruno said he has to "refresh my memory" on Fidelity's exact top-10 ETF rankings when Doherty put him on the spot with the $122 billion flow figure
Doherty later referred back to the same statistic as "that $120 billion figure" — a discrepancy from her own earlier number that Bruno did not correct
Bruno's bottom line is that after Jackson Hole pushed the odds of a Fed rate hike above even money, he is telling clients to stay invested in equities but trim fixed-income duration, diversify across credit buckets, and rotate part of concentrated US/AI exposure into value stocks and international markets.
Products, Companies & Tools Mentioned
Fidelity U.S. Value ETF (FCUV) (Fidelity's US value-factor ETF, built by the quant indexing team to target cheap price-to-book stocks while stripping out size and quality biases)
Fidelity All-in-One Balanced ETF (FBAL) (One of the multi-asset "all-in-one" ETFs Bruno says now account for three of Canada's top ten sellers)
Fidelity All-in-One Equity ETF (FEQT) and Fidelity All-in-One Growth ETF (FGRO) (Named alongside FBAL as Fidelity's other top-selling multi-asset products)
If this was worth your time, send it to someone who has to have a view on this.
Get the latest market chatter as it happens: