Best Canadian ETFs To Buy in 2026
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Last updated: August 2026. All fund data: Source StockAnalysis, data as of August 28, 2026, unless another source is named.
Exchange-traded funds are how most Canadians should own the stock market: one purchase buys hundreds of companies, fees run as low as 0.05% per year, and every major brokerage lets you buy them commission-free or close to it. This guide covers the best Canadian ETFs across five categories, broad Canadian market, S&P 500, all-in-one portfolios, dividends, and specialty funds, with current MERs, yields, and returns for each, plus which account (TFSA or RRSP) each type fits best.
It has been a strong stretch for Canadian equity ETFs. The broad Canadian market funds below returned roughly 30% over the past year, Canadian dividend ETFs returned over 40%, and the gold miners fund returned 66% (Source: StockAnalysis, data as of August 28, 2026). Past returns are not a promise of future ones, so treat those numbers as context, not a forecast.
How we picked these ETFs
Four filters, applied to every fund on this page:
1. Low MER. The management expense ratio is the annual fee skimmed off your return. Below 0.25% is good; below 0.10% is excellent. 2. Scale. Every core pick here manages over $1 billion, which keeps trading spreads tight and closure risk negligible. 3. Sensible index. Broad, rules-based, and easy to explain. If we cannot say what a fund owns in one sentence, it is out. 4. A job to do. Each fund fills a specific role: Canadian core, US growth engine, one-fund portfolio, income, or a deliberate satellite bet.
Quick comparison: the best Canadian ETFs at a glance
| ETF | Category | MER | AUM | Yield | 1-yr return |
|---|---|---|---|---|---|
| XIC | Canadian broad market | 0.06% | $35.1B | 1.91% | +31.5% |
| VCN | Canadian broad market | 0.05% | $18.0B | 1.93% | +30.8% |
| XIU | Canadian large cap | 0.18% | $23.1B | 2.10% | +29.9% |
| VFV | S&P 500 | 0.09% | $35.0B | 0.83% | +21.1% |
| XUS | S&P 500 | 0.09% | $13.2B | 1.11% | +21.1% |
| ZSP | S&P 500 | 0.09% | $24.3B | 0.76% | +21.1% |
| XEQT | All-in-one, 100% equity | 0.21% | $22.1B | 1.56% | +24.8% |
| VGRO | All-in-one, 80/20 | 0.22% | $10.9B | 1.72% | +20.2% |
| XGRO | All-in-one, 80/20 | 0.21% | $5.2B | 1.87% | +19.7% |
| VBAL | All-in-one, 60/40 | 0.25% | $5.9B | 2.09% | +15.2% |
| VDY | Canadian dividend | 0.23% | $9.0B | 2.82% | +43.3% |
| XDIV | Canadian dividend | 0.12% | $6.1B | 3.12% | +42.5% |
| CDZ | Dividend growth | 0.68% | $1.3B | 3.03% | +21.1% |
| XGD | Gold miners | 0.61% | $5.1B | 0.64% | +66.4% |
| XIT | Canadian tech | 0.60% | $0.7B | n/a | +2.6% |
Source: StockAnalysis, data as of August 28, 2026. MER for VGRO confirmed on Vanguard.ca the same day.
How to buy ETFs in Canada
Every fund on this page trades on the TSX, so any Canadian brokerage can buy them. Fees differ: Questrade® offers commission-free ETF purchases, which suits a buy-monthly, hold-for-decades approach, since regular contributions never rack up trading costs. You can open a Questrade account here. Wealthsimple is the beginner-friendly alternative with a simpler interface and commission-free trading of Canadian ETFs.
Setup takes four steps: open the account (TFSA or RRSP first, per the section above), fund it, search the ticker, and set up a recurring buy. The recurring buy is the step that does the compounding.
Best broad-market Canadian ETFs
These are the foundation funds: the whole Canadian stock market in one ticker.
XIC — iShares Core S&P/TSX Capped Composite Index ETF
XIC tracks the S&P/TSX Capped Composite, which is effectively the entire investable Canadian market, for an MER of just 0.06%. It manages $35.1 billion, yields 1.91%, and returned +31.5% over the past year (Source: StockAnalysis, data as of August 28, 2026).
Bull case: the cheapest practical way to own all of corporate Canada, from the big banks through energy, rails, and materials, in one purchase. At $6 a year per $10,000 invested, the fee is close to a rounding error.
Risks: you own Canada’s concentration problem. Financials and energy dominate the index, so a bad year for banks or oil is a bad year for XIC. There is no downside protection in any index fund; it falls as far as the market does.
VCN — Vanguard FTSE Canada All Cap Index ETF
Vanguard’s equivalent tracks the FTSE Canada All Cap Domestic Index at an MER of 0.05%, the lowest on this page. AUM is $18.0 billion, the yield is 1.93%, and the 1-year return is +30.8% (Source: StockAnalysis, data as of August 28, 2026).
Bull case: functionally interchangeable with XIC at a hair-lower fee. Pick whichever fund family you already use; the difference between 0.05% and 0.06% will not decide your retirement.
Risks: identical to XIC — full exposure to a bank-and-resource-heavy market with no cushion in a downturn.
XIU — iShares S&P/TSX 60 Index ETF
XIU holds the 60 largest Canadian companies, with Royal Bank at 9.8% and TD at 6.8% of the fund. MER is 0.18%, AUM is $23.1 billion, the yield is 2.10%, and the 1-year return is +29.9% (Source: StockAnalysis, data as of August 28, 2026). RBC and TD both beat estimates in the banks’ most recent quarter; our Big Six Q3 2026 scorecard covers why that matters for every fund in this section.
Bull case: Canada’s original ETF and one of the most heavily traded securities on the TSX, which makes it the tightest-spread vehicle for large-cap Canada. The slightly higher yield reflects its blue-chip tilt.
Risks: you pay triple XIC’s fee for a narrower portfolio. Sixty mega-caps means even more concentration in the banks than the composite index carries.
Our take: for a Canadian core holding, XIC or VCN wins on fees and breadth. XIU is for investors who specifically want the large-cap tilt and yield.
Best S&P 500 ETFs for Canadians
Canada is about 3% of the world’s stock market. The S&P 500 is where the global growth engines live, and these Canadian-listed funds let you own it in Canadian dollars without currency conversion.
The big three are near-identical: VFV (Vanguard, $35.0B AUM, +21.1% 1-yr, 0.83% yield), XUS (iShares, $13.2B, +21.1%, 1.11% yield), and ZSP (BMO, $24.3B, +21.1%, 0.76% yield). All three charge an MER of 0.09% and none hedges currency (Source: StockAnalysis, data as of August 28, 2026).
Bull case: one fund buys Apple, Microsoft, Nvidia, and the other 500-odd largest US companies at nine dollars a year per $10,000. For most Canadians this is the simplest cure for home-country bias. Several Canadian names ride the same AI wave; see our best Canadian AI stocks piece for the domestic angle.
Risks: valuation and concentration. A handful of US mega-cap tech names drive the index, and they are priced for continued dominance. An unhedged fund also moves with the US dollar: a falling USD eats into returns even when the index rises. And there is a tax wrinkle unique to these funds, covered in the withholding-tax section below, that makes the account you hold them in genuinely matter.
Our take: the three funds are interchangeable on fees and tracking. VFV is the largest and most popular; pick by fund-family preference.
Best all-in-one ETFs (asset allocation funds)
The biggest story in Canadian investing since this page was first written is the rise of the all-in-one ETF. These funds hold thousands of stocks and bonds across Canada, the US, and international markets, rebalance themselves, and require exactly one decision from you: how much equity risk to take. XEQT alone now manages $22 billion. Vanguard cut the management fee on its portfolio funds from 0.22% to 0.17% effective November 18, 2025 (Source: Vanguard.ca, fetched August 28, 2026), so posted MERs on the Vanguard funds trend down from here.
| Fund | Mix (stocks/bonds) | MER | 1-yr return | Best for |
|---|---|---|---|---|
| XEQT (iShares) | 100/0 | 0.21% | +24.8% | Long horizons, maximum growth |
| VGRO (Vanguard) | 80/20 | 0.22% | +20.2% | Growth with a shock absorber |
| XGRO (iShares) | 80/20 | 0.21% | +19.7% | Same as VGRO, iShares version |
| VBAL (Vanguard) | 60/40 | 0.25% | +15.2% | Balanced, nearer-term goals |
Source: StockAnalysis, data as of August 28, 2026. VGRO MER per Vanguard.ca; VGRO’s actual mix was 81.6% stocks / 18.4% bonds as of July 31, 2026 (Vanguard.ca).
Bull case: these funds solve the two problems that actually wreck retail returns, overtrading and failure to rebalance, by automating both. One ticker, global diversification, discipline built in. For a hands-off investor making regular contributions, an all-in-one fund is a complete portfolio.
Risks: you pay roughly 0.15% more than a self-assembled three-fund portfolio for the convenience, and you accept the preset mix, including a home-country overweight to Canada of around a quarter of the equity sleeve. The bond side dampened returns over the past year, which is exactly its job in the other direction: in a down market, XEQT falls furthest of the four.
Our take: if you want one answer, this section is it. XEQT for long horizons, VGRO or XGRO if you want bonds in the mix, VBAL if a 25% drawdown would make you sell.
Best Canadian dividend ETFs
Canadian dividend ETFs had an exceptional year, riding the banks’ rally. If income is the goal, these three lead the category. For individual names instead of funds, see our guide to the best Canadian dividend stocks.
VDY — Vanguard FTSE Canadian High Dividend Yield Index ETF
$9.0 billion in assets, an MER of 0.23%, a 2.82% yield, and a remarkable +43.3% 1-year return (Source: StockAnalysis, data as of August 28, 2026).
Bull case: a concentrated bet on Canada’s biggest dividend payers, which means heavy bank and energy exposure that paid off handsomely this year. Monthly distributions.
Risks: that same concentration cuts both ways. VDY is even more financials-heavy than the broad market, and its trailing yield looks thin right now partly because the price ran up 43%. Do not expect 40% years to repeat.
XDIV — iShares Core MSCI Canadian Quality Dividend Index ETF
The value pick: a 0.12% MER, roughly half of VDY’s fee, with a higher 3.12% yield, $6.1 billion in assets, and a +42.5% 1-year return (Source: StockAnalysis, data as of August 28, 2026).
Bull case: quality screens (payout sustainability, financial health) plus the lowest fee among major Canadian dividend ETFs and the highest yield of the three funds here. Strong candidate for the core income holding.
Risks: a more compact portfolio than VDY, so single-stock and single-sector moves show through. The quality screen also means it can lag when lower-quality high yielders rally.
CDZ — iShares S&P/TSX Canadian Dividend Aristocrats Index ETF
CDZ holds companies that have raised dividends for at least five straight years. MER 0.68%, $1.3 billion AUM, 3.03% yield, +21.1% 1-year return (Source: StockAnalysis, data as of August 28, 2026).
Bull case: dividend growth as a discipline. The aristocrats screen selects for management teams committed to raising payouts, and the portfolio is more diversified beyond financials than VDY or XDIV.
Risks: the 0.68% MER is nearly six times XDIV’s fee, a serious drag on an income product, and it underperformed both cheaper rivals over the past year. Buy it for the strategy or not at all.
Specialty ETFs worth knowing (in moderation)
XGD — iShares S&P/TSX Global Gold Index ETF. Gold miners were the trade of the year: XGD returned +66.4% over twelve months. MER 0.61%, $5.1 billion AUM, 0.64% yield (Source: StockAnalysis, data as of August 28, 2026). Miners are a leveraged play on the gold price, which means the +66% can run in reverse just as fast. Satellite position sizing only.
XIT — iShares S&P/TSX Capped Information Technology Index ETF. Canadian tech in one fund, dominated by Shopify and Constellation Software. Shopify remains one of our highest-conviction Canadian growth stories, and XIT is the diversified way to own it alongside Canada’s other software winners. MER 0.60%, $743 million AUM, +2.6% 1-year return with minimal-to-no distribution yield (Source: StockAnalysis, data as of August 28, 2026). The flat year reflects a breather after big prior gains; a four-stock-dominated sector fund is volatile by construction, so size it accordingly.
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Why the MER matters more than almost anything else
The MER is deducted from the fund’s returns every year whether markets rise or fall. It is the one variable you fully control at purchase.
Take $100,000 growing at 7% a year for 25 years, before fees:
- At XIC’s 0.06% MER, you end with roughly $535,000.
- At a 2% mutual-fund-style fee, you end with roughly $339,000.
Same market, same 25 years, and nearly $200,000 stays with the fund company instead of you. That is the entire case for index ETFs in two numbers. Between two funds tracking the same index, the cheaper one wins; there are no guaranteed returns in markets, but the fee comes out every single year regardless.
TFSA or RRSP: where should each ETF go?
Accounts have jobs, just like funds. The framework we use across this site: the TFSA is where growth belongs, because large capital gains escape tax entirely and losses cannot be claimed anyway, while the RRSP suits decades-long compounding: dividends, index exposure, and steadier holdings.
Applied to this page:
- TFSA: XEQT or an S&P 500 fund for maximum sheltered growth, with the withholding caveat below. Canadian broad-market and dividend ETFs work cleanly here, since Canadian dividends face no withholding tax in any account.
- RRSP: the natural home for US equity exposure and all-in-one funds; long horizons, steady compounding, and the best treaty treatment for US dividends.
- Non-registered: Canadian dividend ETFs like XDIV benefit from the dividend tax credit, and capital losses are claimable.
The US withholding tax wrinkle, in plain English
US dividends paid to Canadians get 15% withheld under the Canada–US tax treaty. Three cases cover almost every situation:
1. US-listed ETF (like VOO) in an RRSP: the treaty exempts retirement accounts, so no withholding. This is the most tax-efficient way to hold US stocks, at the cost of converting currency to US dollars. 2. Canadian-listed US ETF (VFV, XUS, ZSP) in an RRSP or TFSA: the 15% is withheld inside the fund structure before dividends reach you, and registered accounts cannot recover it. With VFV’s current 0.83% yield, that works out to roughly 0.12% a year, a real but modest drag on top of the MER. 3. Any US exposure in a TFSA: the 15% applies regardless of listing and is unrecoverable. The TFSA gives US dividends no special protection.
The practical read: do not let a 0.12% drag scare you out of simple. VFV in a TFSA is still an excellent portfolio. But if you hold six figures of US equities in an RRSP, the US-listed route earns its extra complexity. In taxable accounts, the withheld amount can be claimed as a foreign tax credit, so nothing is lost there.
ETFs vs individual stocks: which should you buy?
ETFs give you the market’s return, minus a small fee, with no single-company blowup risk and nothing to monitor. Individual stocks give you the chance to beat the market, and the chance to trail it badly, in exchange for real research effort. Most companies underperform their own index over long periods; the index return is carried by a minority of big winners, which is the quiet argument for owning all of them via an ETF.
Our approach: a low-cost ETF core (this page), with individual convictions, the growth names and dividend payers we cover in our Canadian stocks pillar guide, sized as satellites around it. That structure lets a Shopify-sized winner matter without letting any single mistake sink the plan.
FAQ: Best Canadian ETFs
What is the best Canadian ETF overall for 2026? For a single-fund portfolio, XEQT: global diversification across thousands of stocks, self-rebalancing, 0.21% MER, and $22.1 billion in assets (Source: StockAnalysis, data as of August 28, 2026). For a Canada-only core, XIC or VCN at 0.06% and 0.05% respectively. The best fund depends on the job you need done, which is why this page is organized by category.
Is XEQT better than VGRO? Different risk levels, not better or worse. XEQT is 100% stocks; VGRO holds about 20% bonds. XEQT returned more over the past year (+24.8% vs +20.2%, Source: StockAnalysis, data as of August 28, 2026) and will fall harder in a bear market. Choose by how much drawdown you can hold through, not by last year’s return.
Are ETFs safe for beginners? Broad-market ETFs are the standard recommendation for beginners precisely because they remove the two biggest beginner risks: picking the wrong company and paying high fees. They still carry full market risk; a diversified ETF fell over 30% in the 2020 crash before recovering. Safe from single-stock disaster, not safe from market cycles.
Should I buy VFV in my TFSA or RRSP? Both work; the RRSP is slightly more efficient. VFV in any account loses 15% of its US dividends to withholding tax, about 0.12% a year at the current 0.83% yield. Only a US-listed S&P 500 ETF held in an RRSP avoids that entirely. Details in the withholding section above.
Do Canadian ETFs pay dividends? Most equity ETFs distribute the dividends of their holdings, quarterly for most funds on this page, monthly for VDY and XDIV. Current yields range from under 1% (S&P 500 funds) to over 3% (XDIV at 3.12%, Source: StockAnalysis, data as of August 28, 2026). Distributions can be taken as cash or reinvested automatically through a DRIP.
How many ETFs should I own? One all-in-one fund is a complete portfolio. A self-built core needs at most three: Canadian (XIC/VCN), US (VFV/XUS/ZSP), and international. Owning five overlapping broad-market funds adds complexity, not diversification; check what each fund holds before adding another.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. All fund data via StockAnalysis as of August 28, 2026, except where a provider page is named; MERs and yields change — confirm with the fund provider. Questrade® is a registered trademark and/or service mark of Questrade, Inc.