5 Best ETFs in Canada

Exchange-Traded Funds (ETFs) have become a popular investment choice for Canadians looking to diversify their portfolios while keeping costs low. With a wide range of options available, it can be challenging to choose the best ETFs. Here are five of the best ETFs in Canada that offer excellent exposure to various asset classes and sectors.

1. Vanguard FTSE Canada All Cap Index ETF (VCN)

The Vanguard FTSE Canada All Cap Index ETF (VCN) is a comprehensive option for investors seeking exposure to the Canadian equity market. This ETF tracks the FTSE Canada All Cap Index, which includes large, mid, and small-cap stocks. With a low management fee and broad diversification, VCN is an excellent choice for those looking to invest in the Canadian market as a whole.

• Ticker: VCN
• Management Fee: 0.05%
• Holdings: Over 200 Canadian stocks
• Category: Canadian Equity

2. iShares Core S&P/TSX Capped Composite Index ETF (XIC)

The iShares Core S&P/TSX Capped Composite Index ETF (XIC) is another top choice for Canadian equity exposure. This ETF tracks the S&P/TSX Capped Composite Index, representing approximately 95% of the Canadian equity market. XIC offers a low-cost way to invest in a broad range of Canadian companies, making it suitable for long-term investors.

• Ticker: XIC
• Management Fee: 0.06%
• Holdings: Around 230 Canadian stocks
• Category: Canadian Equity

3. BMO S&P 500 Index ETF (ZSP)

For those looking to diversify internationally, the BMO S&P 500 Index ETF (ZSP) provides exposure to the U.S. equity market. This ETF tracks the S&P 500 Index, which includes 500 of the largest publicly traded companies in the United States. ZSP is an excellent option for Canadian investors seeking to benefit from the growth potential of the U.S. market.

• Ticker: ZSP
• Management Fee: 0.08%
• Holdings: 500 U.S. stocks
• Category: U.S. Equity

4. iShares Core MSCI All Country World ex Canada Index ETF (XAW)

The iShares Core MSCI All Country World ex Canada Index ETF (XAW) offers global diversification by providing exposure to international markets outside of Canada. This ETF tracks the MSCI ACWI ex Canada IMI Index, covering large, mid, and small-cap stocks from developed and emerging markets. XAW is ideal for investors looking to diversify their portfolios globally.

• Ticker: XAW
• Management Fee: 0.22%
• Holdings: Over 8,000 international stocks
• Category: Global Equity

5. BMO Aggregate Bond Index ETF (ZAG)

For fixed-income exposure, the BMO Aggregate Bond Index ETF (ZAG) is a top choice. This ETF tracks the FTSE Canada Universe Bond Index, which includes a broad range of Canadian government and corporate bonds. ZAG provides a low-cost way to invest in the Canadian bond market, offering stability and income for investors.

• Ticker: ZAG
• Management Fee: 0.09%
• Holdings: Canadian government and corporate bonds
• Category: Fixed Income

Conclusion

Investing in ETFs is an effective way to diversify your portfolio and gain exposure to various asset classes and markets. The Vanguard FTSE Canada All Cap Index ETF (VCN), iShares Core S&P/TSX Capped Composite Index ETF (XIC), BMO S&P 500 Index ETF (ZSP), iShares Core MSCI All Country World ex Canada Index ETF (XAW), and BMO Aggregate Bond Index ETF (ZAG) are among the best ETFs in Canada. Each offers unique benefits and can help you achieve your investment goals while keeping costs low.