Exchange-Traded Funds (ETFs) are the most popular way for Canadians to invest. They offer instant diversification, low fees, and easy access through any brokerage. Here’s how to get started.

What Is an ETF?

Feature	ETF	Mutual Fund	Individual Stock
Diversification	Hundreds/thousands of holdings	Hundreds/thousands of holdings	Single company
Fees (MER)	0.03% – 0.25%	1.5% – 2.5%	$0 (commission)
Minimum investment	Price of 1 share (~$20-100)	Often $500-$1,000	Price of 1 share
Trading	Anytime during market hours	Once daily (end of day)	Anytime
Tax efficiency	Higher	Lower	Depends

Popular Canadian All-in-One ETFs

These single-fund solutions hold a globally diversified portfolio:

ETF	Name	Allocation	MER	5-Year Return
XEQT	iShares Core Equity	100% equity	0.20%	~10% avg
VEQT	Vanguard All-Equity	100% equity	0.24%	~10% avg
XGRO	iShares Core Growth	80% equity / 20% bonds	0.20%	~8.5% avg
VGRO	Vanguard Growth	80% equity / 20% bonds	0.24%	~8.5% avg
XBAL	iShares Core Balanced	60% equity / 40% bonds	0.20%	~7% avg
VBAL	Vanguard Balanced	60% equity / 40% bonds	0.24%	~7% avg
XCNS	iShares Core Conservative	40% equity / 60% bonds	0.20%	~5.5% avg
VCNS	Vanguard Conservative	40% equity / 60% bonds	0.24%	~5.5% avg

For most Canadians, buying one all-in-one ETF and contributing regularly is all you need.

Popular Canadian Index ETFs

Canadian Equity

ETF	Tracks	MER	Yield
XIC	S&P/TSX Composite	0.06%	~3.0%
VCN	FTSE Canada All Cap	0.05%	~2.8%
XIU	S&P/TSX 60	0.18%	~3.1%

US Equity

ETF	Tracks	MER	CAD Hedged?
XUS	S&P 500 (CAD)	0.09%	No
VFV	S&P 500 (CAD)	0.09%	No
XSP	S&P 500 (CAD hedged)	0.10%	Yes
VUN	US Total Market	0.16%	No

International Equity

ETF	Tracks	MER
XEF	Developed markets ex-NA	0.22%
VIU	Developed markets ex-NA	0.22%
XEC	Emerging markets	0.25%
VEE	Emerging markets	0.24%

Bonds

ETF	Tracks	MER	Yield
XBB	Canada Aggregate Bond	0.09%	~3.5%
VAB	Canada Aggregate Bond	0.09%	~3.5%
ZAG	BMO Aggregate Bond	0.09%	~3.5%

Canadian Dividend ETFs

ETF	Strategy	MER	Yield
XDV	Dow Jones Canada Select Dividend	0.55%	~4.0%
VDY	FTSE Canada High Dividend Yield	0.21%	~3.8%
CDZ	S&P Canadian Dividend Aristocrats	0.66%	~3.5%

Fee Comparison: ETFs vs Mutual Funds

Investment	MER	Annual Fee on $100,000	Cost Over 25 Years
All-in-one ETF (XEQT)	0.20%	$200	~$15,000
Index mutual fund	0.50%	$500	~$40,000
Average Canadian equity mutual fund	2.00%	$2,000	~$175,000
Robo-advisor (portfolio)	0.50%	$500	~$40,000

Over 25 years with $100,000 invested (assuming 7% growth), the difference between a 0.20% ETF and a 2.00% mutual fund is approximately $160,000 — all lost to fees.

How to Choose an Account

Account	Tax Treatment	Best For
TFSA	Growth is tax-free	First priority for most Canadians
RRSP	Tax-deferred (taxed on withdrawal)	High earners, reducing current tax
FHSA	Tax-free for first home	First-time home buyers
RESP	Tax-deferred + 20% government grant	Education savings for children
Non-registered	Capital gains + dividends taxed	After registered accounts are maxed

Priority Order for Most Canadians

Priority	Account	Why
1	FHSA (if buying first home)	Tax deduction + tax-free growth + gov’t owns
2	RRSP (employer match)	Free money from employer
3	TFSA	Tax-free growth, flexible withdrawals
4	RRSP (remaining room)	Tax deduction, tax-deferred growth
5	RESP (if have children)	20% CESG grant
6	Non-registered	No contribution limits

Sample Portfolios

Beginner: One-Fund Solution

ETF	Allocation	Suitable For
XEQT or VEQT	100%	Young investors (20+ year horizon)
XGRO or VGRO	100%	Moderate risk (15+ year horizon)
XBAL or VBAL	100%	Conservative growth (10+ year horizon)

Intermediate: Three-Fund Portfolio

ETF	Allocation	Purpose
XIC (Canadian equity)	25%	Home country exposure + dividends
XUS or VFV (US equity)	45%	US market exposure
XEF (International)	20%	Developed international
XBB or VAB (Bonds)	10%	Stability, lower volatility

Retirement Income Portfolio

ETF	Allocation	Purpose
VDY (Canadian dividend)	30%	Canadian dividend income
XUS (US equity)	25%	Growth
XBB (Bonds)	30%	Stability
XEF (International)	15%	Diversification

Growth Projections

Investing $500/month in an all-equity ETF (assuming 7% average return):

Years	Total Invested	Portfolio Value	Growth
5	$30,000	$35,800	$5,800
10	$60,000	$86,300	$26,300
15	$90,000	$158,000	$68,000
20	$120,000	$260,000	$140,000
25	$150,000	$405,000	$255,000
30	$180,000	$610,000	$430,000

Canadian Discount Brokerages

Brokerage	Commission (ETFs)	Account Minimum	DRIP
Wealthsimple Trade	$0	$0	Yes
Questrade	$0 (to buy)	$0	Yes
National Bank Direct	$0	$0	Yes
Desjardins Disnat	$0	$0	Yes
TD Direct Investing	$0 (select ETFs)	$0	Yes
BMO InvestorLine	$9.95	$0	Yes
RBC Direct Investing	$9.95	$0	Yes

Commission-free brokerages like Wealthsimple and Questrade have made ETF investing essentially free.

Key Takeaways

One all-in-one ETF (XEQT/VEQT) is all most Canadians need to start
ETF MERs of 0.20% save ~$160,000 vs 2% mutual fund fees over 25 years
Prioritize TFSA and RRSP (employer match) before non-registered accounts
$500/month at 7% grows to $610,000 over 30 years
Commission-free brokerages (Wealthsimple, Questrade) make it free to buy
All-in-one ETFs automatically rebalance between stocks and bonds
Canadian dividend ETFs (VDY, XDV) benefit from the dividend tax credit
Stay invested long-term — don’t try to time the market

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Canadian ETF Investing Guide: Best ETFs, Fees & How to Get Started (2026)

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