Best ETFs for Canadians seeking to build wealth over the long term.
You already know we love ETFs (exchange-traded funds), they are a smart and low-cost way to access the world’s markets. The following seven ETFs are renowned for their broad diversification, low management expense ratios (MERs under 0.5%), and suitability for a self-directed investing strategy. Each trades on the Toronto Stock Exchange (TSX), making them easily accessible for purchase in Canadian dollars.
Before we dive in, what is an ETF if you aren’t already familiar? An ETF (exchange-traded fund) is an investment fund that holds a collection of assets, such as stocks or bonds, and can be bought and sold on a stock exchange just like an individual stock. An ETF is a basket that holds other assets within it. If the value of the assets within it increases, then the ETF’s value will also increase; conversely, if the value of the assets within it decreases, then the ETF’s value will also decrease.
Here are some of the best ETFs for Canadians to buy and hold:
Canadian Market Focused
Vanguard FTSE Canada All Cap Index ETF (VCN.TO)
Yearly fee (MER): 0.05%
Focus: Canadian stocks
VCN provides diversified access to Canadian companies of all sizes, including banks, energy, and tech. It’s a simple, low-cost way to invest in the Canadian economy.
iShares Core S&P/TSX Capped Composite ETF (XIC.TO)
Yearly fee (MER): 0.06%
Focus: Canadian stocks
Tracks the S&P/TSX Capped Composite Index, providing diversified exposure to large, mid, and small-cap Canadian equities.
Vanguard FTSE Canadian High Dividend Yield Index ETF (VDY.TO)
Yearly fee (MER): 0.22%
Focus: Canadian stocks
Focuses on Canadian stocks with high dividend yields (mostly large-cap Canadian equities). Good for investors seeking income.
US Market Focused
Vanguard S&P 500 Index ETF (VFV.TO)
Yearly fee (MER): 0.09%
Focus: U.S. large-cap stocks
VFV tracks the S&P 500, giving you exposure to America’s biggest and most successful companies. Its low fee and strong historical returns make it a foundational holding for long-term growth.
iShares Core S&P U.S. Total Market Index ETF (XUU.TO)
Yearly fee (MER): 0.07%
Focus: Entire U.S. stock market
XUU covers the full spectrum of U.S. equities, from large to small companies. This broader exposure helps capture more of the U.S. market’s growth potential.
Developed Markets (outside of North America):
BMO MSCI EAFE Index ETF (ZEA.TO)
Yearly fee (MER): 0.22%
Focus: Developed markets outside North America
ZEA tracks companies in Europe, Australasia, and the Far East. It’s a great way to balance your North American holdings with international developed markets.
Emerging Markets:
iShares Core MSCI Emerging Markets IMI Index ETF (XEC.TO)
Yearly fee (MER): 0.24%
Focus: Emerging markets
XEC opens the door to fast-growing economies like China, India, and Brazil. While more volatile, emerging markets can boost long-term returns.
Global (excluding Canada):
iShares Core MSCI All Country World ex Canada Index ETF (XAW.TO)
Yearly fee (MER): 0.22%
Focus: Global stocks (excluding Canada)
XAW is a one-stop solution for international diversification, holding U.S., developed, and emerging market stocks in a single fund. It’s an excellent complement to a Canadian equity ETF.
Vanguard FTSE Global All Cap ex Canada Index ETF (VXC.TO)
Yearly fee (MER): 0.22%
Focus: Global stocks (excluding Canada)
VXC gives you exposure to thousands of companies in the U.S., developed, and emerging markets, excluding Canada, making it an excellent tool for global diversification.
Why These ETFs?
- Low Fees: All have MERs well below 0.5%, so more of your returns stay invested.
- Diversification: Exposure to thousands of companies across sectors and geographies.
- Long-Term Growth: These ETFs track major indices with strong historical performance.
- Accessibility: All can be purchased easily through Canadian self-directed investing accounts.
How to Buy The Best ETFs for Canadians?
Open up a self-directed trading account, deposit money into it and then buy some of the best ETFs for Canadians that align with your goals. It is as simple as that!
We really like Questrade as a platform since they charge $0 commission for their trades and no account fees. Click here to open your new account and get $50 when you do so.
In Summary:
These seven ETFs are the best ETFs for Canadians because they provide a robust, globally diversified foundation for Canadian investors seeking long-term growth with minimal fees. By holding a mix of Canadian, U.S., and international equities, you can weather market ups and downs and steadily build wealth over time—all with the convenience and transparency of self-directed investing.
Disclaimer:
This article is for informational and educational purposes only and does not constitute financial, investment, or legal advice. The “best ETFs for Canadians” and investment strategies discussed are provided as general examples and may not be suitable for your individual circumstances. Past performance is not indicative of future results, and all investments carry risks, including the potential loss of principal. Before making any investment decisions, you should conduct your own research and consult with a qualified financial advisor or professional to ensure that any investment is appropriate for your personal financial situation and objectives. The authors and publishers of this article are not liable for any losses or damages arising from the use of this information.
