What is the best index fund in Canada?

For most Canadians, XEQT (iShares Core Equity ETF Portfolio) or VEQT (Vanguard All-Equity ETF Portfolio) are the best choices. They provide 100% global stock diversification in a single ETF with MERs of 0.20–0.24%. If you want some bonds, XGRO or VGRO (80/20 stock/bond split) are excellent.

How much does it cost to buy index funds in Canada?

ETF purchases are free at both Wealthsimple Trade and Questrade. The ongoing cost is the MER (Management Expense Ratio), which ranges from 0.03% for single-market ETFs to 0.24% for all-in-one portfolios. On a $100,000 portfolio, an MER of 0.20% costs $200/year vs $2,000/year for a typical mutual fund at 2%.

Are index funds better than mutual funds in Canada?

Yes, for most investors. Index ETFs have much lower fees (0.03–0.25% vs 1.5–2.5% for mutual funds), and over 80–90% of actively managed mutual funds underperform their benchmark index over 15+ years. Lower fees compound into hundreds of thousands in savings over a lifetime.

Best Index Funds & ETFs in Canada (2026)

Index ETFs are the simplest, cheapest, and most effective way for Canadians to invest. One all-in-one ETF gives you instant diversification across thousands of global stocks for a fraction of a percent per year.

Quick answer: Buy XEQT or VEQT for 100% global stocks (best for 15+ year horizon). Buy XGRO or VGRO for 80/20 stocks/bonds (more stability). Hold in a TFSA for tax-free growth. Purchase for free at Wealthsimple Trade or Questrade.

Best All-in-One ETFs (One Fund Solutions)

ETF	Provider	Allocation	MER	Canadian	US	International	Bonds
XEQT	iShares	100% stocks	0.20%	24%	46%	30%	0%
VEQT	Vanguard	100% stocks	0.24%	30%	42%	28%	0%
XGRO	iShares	80/20	0.20%	19%	37%	24%	20%
VGRO	Vanguard	80/20	0.24%	24%	33%	23%	20%
XBAL	iShares	60/40	0.20%	14%	28%	18%	40%
VBAL	Vanguard	60/40	0.24%	18%	25%	17%	40%
XCNS	iShares	40/60	0.20%	10%	18%	12%	60%
VCNS	Vanguard	40/60	0.24%	12%	17%	11%	60%

Best Canadian Stock ETFs

ETF	Index	Holdings	MER	Yield	Best For
XIC	S&P/TSX Composite	220+	0.06%	~2.9%	Broad Canadian market
VCN	FTSE Canada All Cap	180+	0.05%	~2.8%	Broad Canadian market
XIU	S&P/TSX 60	60	0.18%	~3.0%	Large-cap Canadian
XDV	Dow Jones Select Dividend	30	0.55%	~4.1%	Canadian dividends
VDY	FTSE High Dividend	50+	0.22%	~4.3%	Canadian dividends

Best US Stock ETFs (Canadian-Listed)

ETF	Index	MER	Currency-Hedged	Best For
XUU	S&P Total Market	0.07%	No	Broad US market
VUN	CRSP US Total Market	0.16%	No	Broad US market
XUS	S&P 500	0.10%	No	US large-cap
VFV	S&P 500	0.09%	No	US large-cap
ZSP	S&P 500	0.09%	No	US large-cap
QQC	NASDAQ-100	0.39%	No	US tech/growth

Best Global/International ETFs (Canadian-Listed)

ETF	Coverage	MER	Best For
XEF	Developed markets (ex-NA)	0.22%	International developed
VIU	Developed markets (ex-NA)	0.22%	International developed
XEC	Emerging markets	0.25%	Emerging markets
VEE	Emerging markets	0.24%	Emerging markets

Index ETFs vs Mutual Funds: Cost Comparison

Investment	Value After 30 Years ($500/month at 7% return)	Fees Paid Over 30 Years
Index ETF (MER 0.20%)	$580,000	~$18,000
Balanced mutual fund (MER 2.0%)	$422,000	~$176,000
Bank advisor fund (MER 2.3%)	$400,000	~$198,000
Difference (ETF vs mutual fund)	+$158,000	Saved $158,000

The 1.8% fee difference compounds to over $158,000 lost to fees over 30 years on just $500/month.

Which All-in-One ETF Is Right for You?

Your Situation	Recommended ETF	Why
Under 30, high risk tolerance	XEQT / VEQT	100% stocks, maximum long-term growth
30–45, moderate risk tolerance	XGRO / VGRO	80/20, some bonds for stability
45–55, approaching retirement	XBAL / VBAL	60/40, balanced growth and protection
55+, in or near retirement	XCNS / VCNS	40/60, capital preservation focus
Any age, can’t sleep during crashes	One step more conservative	Peace of mind > optimal returns

iShares (X-series) vs Vanguard (V-series)

Factor	iShares (BlackRock)	Vanguard
MER	Slightly lower (0.20%)	0.24%
Assets under management	Larger	Slightly smaller
Canadian home bias	Lower (~24%)	Higher (~30%)
Tracking error	Very low	Very low
Recommendation	XEQT/XGRO for lower fee	VEQT/VGRO slightly more Canadian

The difference is marginal. Pick either and stick with it.

Bottom Line

Index ETFs are the most cost-effective way to invest in Canada. One all-in-one ETF (XEQT for growth or XGRO for balanced) in a TFSA is all most Canadians need. Buy it for free at Wealthsimple or Questrade and contribute monthly. Don’t overthink it — the best fund is the one you’ll stick with.

Tags: