Basically, ETFs are funds that are traded or exchanged to track a specific index. Instead of one stock, you get a different type of ETFs
In Canada, there are over 700 different ETFs. These ETFs are broken down into different types:
- Equity ETFs
- Bond ETFs / Fixed Income ETFs
- Commodity ETFs
- Currency ETFs
- Specialty ETFs
- Factor ETFs
- Sustainable ETFs
- Asset Allocation ETFs (all-in-one ETFs)
There are even stock ETFs. Each of these ETF types is invested differently, which affects the ETF’s cost, MER, and risk. When you are looking to purchase an ETF, it is important to consider the ETF’s type and its individual characteristics.
Whether you are researching an ETF on your own, with one of the Canadian banks, or with a private broker, you will be able to find the individual features of each ETF. It will show you what the ETF is made up of, its MER, its share price, where you can invest in it, and any other relevant information you may need. The ETF type is relevant to these factors.
It’s also important to consider whether you’re going to get active ETFs or passive ETFs. Passive ETFs manage themselves, while active ETFs are bought and sold during the day. Passive ETFs tend to be more than active ETFs since they require less work.
With ETFs, it’s important to remember that the Canadian Investment Regulatory Organization regulates them. Also, if you invest with a brokerage, then your funds could be covered by the Canadian Investor Protection Fund.
Best BlackRock ETFs Canada
The iShares S&P TSX 60 Index ETF (UIX) was created by BlackRock. This ETF replicates the S&P/TSX index’s performance net of expenses. It is one of the most liquid and largest ETFs in Canada. It has the instrument symbol UIX, indicating exposure to large companies in Canada. Fun fact: this ETF was established in 1990, making it the world’s first ETF.
Another ETF managed by BlackRock is the iShares Core Equity ETF Portfolio (EXQT). This is another fund that looks for long-term capital growth. It primarily invests in ETFs managed by BlackRock Canada. It is monitored and rebalanced as needed. It also has a low MER of just 0.20%, or $2.00 per $ 1,000 invested.
Best Canadian Dividend ETF
In Canada, there are plenty of ETFs in this category, but currently, one of the best Canadian dividend ETFs is iShares Canadian Financial Monthly Income ETF (TSE:FIE). This ETF doesn’t focus solely on the banking sector; it also includes insurers and asset managers. Around ⅓ of this ETF is composed of preferred shares and bonds, with the rest Canadian equities.
The five holdings of this ETF are: Canadian preferred share ETFs, Canadian corporate ETFs, Royal Bank, CIBC, and Bank of Montreal.
Because the preferred shares, bonds, and equities are split in this ETF, it is less volatile. This means you are more likely to earn money from this ETF. Right now, you can get a 5% return, paid monthly. It also has lower fees of 0.81%, which equals $8.10 per $1,000 invested.
Best ETF for TFSA
If you are looking to invest your ETF in a TFSA, one of the best options is the iShares S&P/TSX Capped Info Tech ETF (TSE: XIT). This is because a TFSA is tax-free, giving investors a stronger incentive to pursue more aggressive investments. Lower taxes mean there is more wiggle room for loss and return.
That being said, this ETF has a turnover rate of 65%. It tracks the Capped Information Technology index and is meant for long-term growth, which is another reason it is a great candidate for a TFSA investment.
While there aren’t many large tech companies in Canada, this ETF is made up of some of the most successful ones. Over 50% of the ETF is made up of Shopify and Constellation Software. It also has CGI Inc, Open Text and Descartes Systems. These are just the top 5 out of a total of 30 holdings and are a big part of the reason that this fund has given an annualized return of 18.41% over the last 10 years. The fees for this ETF are only 0.61%, or $6.10 per $1000 invested.
Best Canadian Materials ETF
Just like with the other categories, there are so many ETFs to choose from. The iShares S&P/TSX Capped Materials Index ETF (XMA) is currently considered one of the best Canadian ETFs for materials stocks. This index looks to replicate the performance of the S&P/TSX Capped Materials Index. It has been around since 2005 and is intended for investors seeking long-term growth.
While the management expense ratio isn’t as low as we have seen with some other ETFs, it’s still relatively low at 0.60%, which is equivalent to $6.00 per $1000 invested. With low investment costs, it makes sense for investors, and another reason investors choose this fund is its targeted exposure to Canadian mineral companies. This makes it low risk, and with 50 different holdings, it is meant for long-term investors.
Best Vanguard ETFs Canada
With Vanguard, there are a ton of ETFs to choose from, but one of the best is the Vanguard Balanced ETF Portfolio (VBAL-T). As the name suggests, this is a balanced portfolio, making it great for investors looking for moderate risk. The split for this fund is 60/40: 60% in equity and 40% in fixed-income securities. Another great thing about this fund is its low management fees. They are at 0.24%, which equals $2.40 for every $ 1,000 invested.
Best U.S. ETFs in Canada
Many Canadians believe that you can only invest in Canadian stocks and ETFs. That isn’t true. You can invest in US investments. You just might have to pay the US Dividend Withholding Tax. Some investments aren’t subject to this, though, for different reasons. Those are often the ones that investors like since there isn’t an extra tax involved.
Keeping this in mind, one of the best U.S. ETFs in Canada and one of the most recommended is the Horizons S&P 500 Index ETF (HXS). This fund has been around since 2010 and is managed by Horizons ETFs Management (Canada) Inc. That said, the fund invests in public equity markets in the US, specifically in the growth and value stocks of large-cap companies (companies with market values between $10 billion and $200 billion). As mentioned in the name, it looks to track the S&P 500 index.
One of the reasons Canadians choose to invest in this fund is its low management expense ratio (MER) of 0.10%, which is $1.00 per $1,000 invested. Another reason is that it is tax-efficient. This fund doesn’t receive distributions, so it isn’t subject to the US Dividend Withholding Tax.
Best International ETF in Canada
In Canada, there are a few international ETFs that are worth investing in. That said, there is one that stands above the rest. This is the Vanguard FTSE Global All Cap ex Canada Index ETF (TSE: VXC)
The Vanguard FTSE Global All Cap ex Canada Index ETF tracks the performance of a broad global equities index. It focuses on developed and emerging markets. The distribution frequency for this ETF is quarterly; the MER is 0.22%, and the management fee is 0.20%. This fund has been around since June of 2014.
Best Canadian Equity ETFs
It’s no surprise that when we talk about the best Canadian equity ETFs, one of these is a Vanguard ETF. Specifically, the Vanguard FTSE Developed All Cap ex North America Index ETF (VIU). It’s distributed quarterly, has an MER of 0.23%, management fees of 0.20%, and $4.29 Billion assets under management.
Another one of the best Canadian equity ETFs is the TD Canadian Aggregate Bond Index ETF (TDB). This one has an MER of 0.08%, a 12-month yield of 4.22%, and $1.6 billion in assets under management.
Best Performing Canadian ETF
Currently, the best-performing Canadian ETF is the BMO Equal Weight Global Gold Index ETF (ZGD). With this ETF, the distribution frequency is annual, the MER is 0.60%, the management fee is 0.55%, it has $102.22 million in assets under management, and an annualized distribution yield of 0.63%.
Best Canadian REIT ETFs
Reits, or Real Estate Investment Trusts, are a popular way for thematic ETFs to track funds. In Canada, there are quite a few great REIT ETFs. That said, one of the best is iShares S&P/TSX Capped REIT Index ETF (XRE). This ETF has a 10-year annualized return of 5.3%, an average market capitalization of $3,880, and a MER of 0.61%.
Other Options for ETFs in Canada
If you aren’t looking for an ETF in one of the categories listed above, don’t worry; you still have plenty of options. There are quite a few different options out there to choose from, so let’s take a look at some other categories and what ETFs are recommended.
Safest ETFs
If you are looking for an ETF with low risk and a return, there are a few options, but generally, you are looking for an all-in-one or balanced ETF. These are low-cost, already balanced options designed to deliver a return or a small loss, if any at all. Here are two recommendations.
BMO Conservative ETF
This ETF is fairly new, having been around since 2019. This is a passively managed ETF, so it pretty much manages itself. That being said, BMO Asset Management Inc manages all BMO ETFs, so you don’t need to go through a 3rd party broker. You can purchase a BMO ETF, like this one, right through the bank.
Since this is an all-in-one ETF, it has a relatively good balance of 60% fixed income and 40% equity. Also, its MER is relatively low at 0.15%, or $1.50 per $ 1,000 invested. This is a low-risk investment, great for first-time and long-term investors.
iShares Core Balanced ETF Portfolio
This is another passively managed ETF. It has a bit more of an extensive track record, having been around since 2007. While this ETF has a low to medium risk, it has a strong track record of performance and holds a large amount of assets.
This ETF also has a relatively low MER. It sits at only 0.20%, or $2.00 per $ 1,000 invested. As the name suggests, it is a well-diversified ETF. It targets 60% in equity and 40% in fixed income. This ETF is another great option for investors who don’t want to spend a lot and want an investment with minimal risk.
Low-Cost ETFs
When you are looking for a low-cost ETF, there are so many different directions you can take. Here are the top 3 currently recommended.
Invesco NASDAQ 100 Index ETF (NYSE: IVZ)
This fund is relatively new, having been established in 2021. This is another passively managed fund that aims to reflect the NASDAQ 100. There isn’t much performance tracking for this fund, and it yields relatively little. That being said, the MER is 0.20%, or $2.00 per $ 1,000, so it is still a low-cost option.
The NASDAQ 100 is a popular US index, and this ETF lets you invest in Canada. The NASDAQ 100 itself is a relatively concentrated index of US tech stocks, so investing in a fund that follows it means you’re getting a more concentrated, less diversified fund. Some investors prefer this, especially for long-term growth.
TD Canadian Equity Index ETF (TSE: TTP)
The ETF has a very low MER of 0.05% or $0.50 per $ 1,000 invested. This fund looks to replicate the Canadian market, so it is relatively broad. While this fund is heavily concentrated in materials, financials and energy, it is extremely low-cost. That, and you get diversification in the Canadian stock market. Because of the low risk, low cost, and diversification, it is a popular ETF for investors.
Largest ETFs
Something that might interest you is the largest ETFs in Canada. These ETFs have tons of assets, but often trade at prices similar to other ETFs.
iShares S&P 60 Index ETF (TSE: XIU)
In this fund, the name speaks for itself. It comprises the 60 largest companies on the TSX. This ETF has over 10 billion in assets under management, making it the largest in Canada. The MER on this fund is only 0.15% or $1.50 per $1000 invested, and it is a medium-risk investment.
Some facts about this ETF are that it was established in 1990 and is the world’s first ETF. On top of being one of the largest ETFs, it is also the most liquid, and it gives you exposure to some of the largest Canadian companies. Overall, this fund is intended for long-term growth, as it replicates the S&P 60 Index.
BMO S&P 500 Index (TSE: BMO)
As you probably guessed, this ETF is designed to replicate the S&P 500 Index. It has been around since 2012 and has shown consistent growth since then. Like any stock, it fluctuates but tends to grow consistently.
The MER on this is only 0.09%, or $0.90 per $ 1,000 invested. Like the other larger fund above, this fund is also medium risk.
Bitcoin ETFs in Canada
Bitcoin ETFs are relatively new in North America. They have only been around since February 2021. The first bitcoin ETF was the Purpose Bitcoin ETF (BTCC). Now, there are 5 that are the most popular in Canada. The others are Evolve Bitcoin ETF (EBIT), CI Galaxy Bitcoin (BTCX), 3iQ CoinShares Bitcoin (BTCQ), and Ninepoint Bitcoin ETF (BITC).
Out of these 5 ETFs, the Purpose Bitcoin ETF is the most recommended in Canada. This ETF has $584.4 million in assets under management and management fees of 1.00%. While this is higher than other bitcoin ETFs, it can be invested in TFSA, RRSP, and other investment accounts, and is listed in both CAD and US dollars.an be invested in TFSA and RRSP as well as other investment accounts and is listed in both CAD and US dollars.
Other Vanguard ETFs
While we already mentioned the most recommended Vanguard ETF. Here are 5 more that are worth mentioning.
1. The Vanguard Canadian Bond Index ETF(VAB) looks to track the performance of the Canadian Bond Index. It is made up of 57 holdings and has a relatively low MER of 0.09%, or $0.90 per $1000 invested.
2. The Vanguard FTSE Canada Index ETF(VCE) consists of 51 holdings and has a decent amount of diversification in its portfolio while providing exposure to Large and Mid-Cap Canadian Equities. It has $1,332.64 million in assets under management.
3. The Vanguard FTSE Canada All Cap Index ETF (VCN: CN) is one of the Canadian equity ETFs that looks to track the performance of a broad Canadian equity index. This index tracks the returns of large-, mid-, and small-cap, publicly traded securities. All of these are on the Canadian market.
4. The Vanguard Growth ETF Portfolio (VGRO.TO) is a fund that is actively managed and doesn’t follow an index. It’s also a bit smaller, with only 7 underlying holdings. That said, it still has $ 3,764.59 million in assets under management.
5. The Vanguard FTSE Emerging Markets ETF (VWO) invests in stocks of companies from emerging markets around the world. This particular ETF looks to track the FTSE Emerging Markets All Cap China A Inclusion Index. Because of this, it is considered a high-risk ETF. It is only really recommended for investors looking for a long-term investment.
TSX and ETFs
TSX, also known as the Toronto Stock Exchange, is where you can find ETFs. There are over 700 different ones in Canada.
ETFs or Mutual Funds for Growth
ETFs are a popular option because they are passively managed and less volatile than many other investment options. Most ETFs can also be invested in RRSPs and TFSAs. This avoids paying taxes on your investment until you start using it.
Just like mutual funds and RRSPs, ETFs are used for long-term investing because of their lower risk. The lack of volatility compared to other investments helps ensure you achieve the growth you are looking for in your retirement income. Investing your money and not seeing a return is scary; that’s why so many people choose ETFs.
Another reason that ETFs are less risky is that they are passively managed. Actively managed mutual funds are riskier, and you can’t just let them do their thing. All mutual funds are actively managed. That’s the major difference between them and ETFs. The lack of involvement needed for ETFs is another enticing factor.
Best New ETFs Launched in Canada in 2026
In Canada, the ETF market continues to boom, meaning there will be some hot new ETFs. Some of the most notable right now include:
- Global X (Time Horizons) Active U.S. Dividend ETF (TSX: DIVY)
- Fidelity Emerging Markets Opportunities (TSX: FEMO)
- Russell Investments Fallen Angels ETF (TSX: HALO)
- Globall X (Time Horizons) Enhanced All-In-One Commodity Producers Equity Covered Call ETF (TSX :CML)
- Avantis CIBC All-Equity Asset Allocation ETF (CAGE)
How ETF MERs Changed Across Canada in 2026
MERs haven’t shifted that much in Canada in 2026. In fact, for most ETFs, the MERs have remained the same or any increases have been small. The MERs themselves are based on the ETF and the company that holds them.
Are Covered Call ETFs Still Worth it in 2026?
If you’re an investor in retirement or looking to prioritize cash flow, covered call ETFs remain a good choice. This is because they aren’t good for maximizing long-term wealth. After all, they cap your potential upside in exchange for high, consistent yields. In a flat or moderately rising market, they’re also a good choice.
Best Performing ETFs of the Past Year
Now that we are in the middle of 2026, we have a clearer picture of what happened in 2025. Here’s a look at some of the best-performing ETFs.
| ETF | Price | Yield |
| iShares S&P/TSX Global Gold Index ETF | $49.37 | 0.59% |
| Global X Copper Producers Index ETF | $59.0 | 0.17% |
| iShares S&P/TSX Capped Energy Index ETF | $27.05 | 2.66% |
Spot Bitcoin and Ethereum ETFs in Canada Explained
If you’re looking to invest in cryptocurrency without buying it directly, one way to do so is through ETFs instead of individual stocks. If you’re looking for regulated investment funds that track the market price of the actual currency fluctuations, then both Spot Bitcoin and Ethereum ETFs are great options.
When you purchase a share in a spot ETF, the fund manager purchases and securely stores the exact amount of Bitcoin or Ethereum in cold storage. The ETF’s share price is designed to closely track the ETF’s real-time price. They’re also really easy to buy and can be purchased through online brokerages, just like traditional stocks.
Should You Switch ETFs in 2026 to Lower Fees
Whether or not this is a good idea depends on the type of ETF you currently hold. When evaluating ETFs, you should consider if they’re actively or passively managed and if you’re already in a low-cost, broad-market index.
Here are some examples of when you should switch:
- You are in actively managed ETFs or Mutual Funds: If you are currently holding an actively managed ETF with an MER of 0.5% to 1.00%, switching to a passively managed fund can save thousands of dollars.
- The fee difference is large: If you can largely reduce your annual fee, then switching can also be worth it.
- You’re investing in a registered account: Since registered accounts are known for their tax efficiency, you’re able to sell and switch without triggering any tax drag. However, if your funds are in non-registered accounts, you will receive a tax bill. This can be even higher if your currency hedging or your funds aren’t in Canadian dollars, due to currency fluctuations.
Best ETFs for the New FHSA in 2026
If you’re looking to invest in the First Home Savings Account, then there are some better ETFs to buy for most new investors. However, it also depends on the timeline you have in mind for purchasing your first home.
If you’re looking at a short timeline of less than 3 years, then the best bets for your concentration risk profile are cash/high-interest savings accounts and short-term bonds. For medium- to long-term timelines of 5 years or more, consider all-in-one funds, growth funds (80% stocks and 20% bonds), and balanced funds (60% stocks and 40% bonds).
Sector ETFs Outperforming the Market in 2026
When it comes to sectors outperforming the market, a few stand out. While it still makes sense to research both large and small companies, pay attention to equity holdings and tracking errors; investing in these sectors can be more profitable. You can also see more dividend increases.
Some of these include:
- Financials
- Low Volatility/Dividend
- Real Estate
- Tech (Global Innovators)
- Artificial Intelligence
ETF Rebalancing Schedule and Tax Implications
Depending on the ETF you have, it may require automatic rebalancing or manual rebalancing done by institutional investors. This has to be done to keep the ETF at its target and is usually done when it’s varied by more than 5%.
When it comes to tax implications, the asset class, whether their niche ETFs, and whether you invest in international equities, all make a difference. The type of account you invest in also matters. Investing in a registered account saves you money in taxes, while you’ll have to pay your full taxes if you register in a non-registered account.ing, as well as mutual funds and ETFs. Due to the risk factors alone, many Canadian investors choose to create a diversified portfolio using ETF investing through reputable ETF providers.
In Canada, whether you choose to invest in global investments, Canadian investments or anything else, each ETF invests differently. This allows you to invest in multiple different things. You can also manage your ETFs yourself, meaning even beginner investors can do well with ETFs. That said, before you buy ETFs, do your research. This can mitigate your risk and help you get the most out of your investments.
