What ETFs to Buy in Canada – Canada’s Top ETFs in March 2025

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        Key takeaways

        Low-Cost U.S. & Global Access – Enable Canadian investors to gain cost-effective access to international markets.

        Broad Market Coverage – These ETFs provide exposure to Canadian, U.S., and international stocks, ensuring diversification.

        Dividend & Fixed Income Options – With the expansion of different types of ETFs, there is something for everyone these days.

        One ETF I like way better than the ones on this list.

        Millions of Canadian investors have ditched their mutual funds for exchange-traded funds (ETFs). In this article, I’m going to go over some of the best ETFs to buy in Canada today.

        But first, lets dive into the intricacies of an ETF.

        What’s an ETF?

        Before we tackle the best ETFs, let’s back up for a minute. What exactly is an ETF, and why are they solid investments?

        An ETF is a pooled basket of securities to track an underlying index. Most ETFs only make changes when the index they follow makes changes, making them among the most passive investments. This lack of activity helps keep fees down. ETFs are bought and sold on stock exchanges, just like individual stocks. 

        ETFs are like mutual funds in many ways, but there are a few critical distinctions, primarily in the legal structure. While mutual funds pool capital and buy securities, ETFs use something called an authorized participant to effectively manage the liquidity and the issuance/redemption of units on the public markets.

        This is primarily why mutual funds tend to be purchased directly from a financial advisor, while ETFs are purchased directly on the stock exchange — although there are more and more financial advisors who are abandoning mutual funds in exchange for ETFs. As mentioned, they are similar investments but have a different legal structure.

        Why switch to ETFs?

        The most important reason is fees, of course. A mutual fund can easily charge a 2% management fee, with expenses even higher for some specialty funds. Most ETFs, meanwhile, charge fees about one-tenth that much, or 0.2%. Some specialty ETFs charge more, but most of the big ones charge less, with many charging fees under 0.1% of assets under management.

        Lower fees automatically translate into higher returns, at least when you compare an ETF to a similar mutual fund. Remember, your net return on an investment is essentially the gross return minus the fees.

        There are only two variables. If one of those variables goes down, that’s a good thing. The math doesn’t lie; more mutual funds would beat the market if they charged comparable fees to ETFs. 

        The rise of ETFs has also made investing simpler. The average investor can put their capital into an index ETF with just a few clicks of a mouse. Or, depending on the service they use, an investor can even set automatic withdrawals from their bank account to be immediately invested in ETFs, ensuring they’re putting precious capital to work every paycheque or every month. 

        The finance industry knows ETFs are the future, so it has responded accordingly. Thousands of different ETFs have popped up, ranging from simple products that track broad indexes to ETFs that try to mimic complex investing strategies, or ETFs that assist in avoiding taxable events such as tax-efficient ETFs. It’s enough to overwhelm even an experienced investor. 

        Let’s take a closer look at some of the top exchange-traded funds in Canada today. I’m going to include a wide variety of asset classes and geographical exposures, so there is something for everyone on this list.

        What are some of the best ETFs to buy in Canada today?

        Canada’s largest blue-chip ETF

        iShares TSX 60 ETF (TSX:XIU)

        XIU tracks the S&P/TSX 60, which consists of Canada’s largest and most liquid stocks. It offers a simple, cost-effective way to gain exposure to the Canadian equity market.

        • Top 60 Canadian companies – Provides exposure to leading firms across key sectors like financials, energy, and materials.
        • Highly liquid ETF – With a long history and deep liquidity, XIU is ideal for large investors and traders.
        • Lower volatility than smaller-cap stocks – Large-cap stocks tend to be more stable, making XIU a solid core holding.
        • Dividend yield appeal – Many top holdings pay dividends, adding income potential for investors.
        • Low management fee (0.18%) – Cost-efficient compared to actively managed funds.
        • Bank earnings strength – Financial stocks dominate XIU and will be influenced by interest rates.
        • Commodity cycles – Energy and materials stocks may rise if global demand strengthens.
        • Interest rate policy – A pause or cut in rate hikes could benefit equity valuations.
        • Heavy financials exposure – Canadian banks make up a large portion of the fund.
        • Resource-driven market – Energy and mining stocks are cyclical, impacting performance.
        • Lack of tech growth stocks – Compared to U.S. markets, XIU has limited exposure to high-growth sectors.

        Broad exposure to Canadian equities

        Global X Capped TSX Composite ETF (TSX:HXCN)

        HXCN tracks the S&P/TSX Composite Index, providing broader market exposure than XIU by including mid- and small-cap stocks.

        • More diversified than XIU – Includes small- and mid-cap companies that XIU omits.
        • Capped structure – Prevents over-concentration in any single stock.
        • Low-cost alternative (0.05% MER) – One of the cheapest ways to own the Canadian market.
        • Growth and income balance – Combines large blue-chip stocks with smaller growth companies.
        • No direct currency risk – Holdings are in Canadian dollars, reducing FX exposure.
        • Mid-cap stock resilience – Could outperform if smaller Canadian companies gain traction.
        • Banking sector performance – Financials remain the dominant sector in Canadian equities.
        • Global trade conditions – Canada’s economy is tied to exports, affecting market growth.
        • Cyclical exposure – Energy and materials sectors can be volatile.
        • Less liquidity than XIU – Mid- and small-cap exposure can be harder to trade.
        • Canadian market concentration – Lacks the sector diversity of U.S. and global markets.

        Defensive Canadian equity ETF with lower volatility

        BMO Low Volatility Canadian Equity Fund Srs ETF (TSE: ZLB)

        ZLB invests in Canadian stocks with lower historical volatility, aiming to reduce risk while maintaining strong returns. It selects companies based on stability and downside protection, making it an attractive choice for conservative investors.

        • Focus on lower volatility stocks – The ETF prioritizes companies with historically lower price fluctuations, providing smoother returns over time. This reduces exposure to sharp market downturns.
        • Defensive sector allocation – ZLB leans towards defensive sectors like consumer staples, utilities, and healthcare, which tend to perform well in uncertain economic conditions.
        • Strong historical risk-adjusted returns – Historically, low-volatility strategies have delivered competitive long-term performance while reducing drawdowns during market declines.
        • Good alternative to broad market exposure – While broader Canadian market ETFs include more cyclical stocks, ZLB focuses on stability, offering a different risk-return profile.
        • Lower correlation with high-growth stocks – Investors looking for a balanced portfolio can use ZLB to complement higher-risk growth ETFs, improving overall diversification.
        • Potential for economic slowdowns – Defensive stocks may outperform if economic growth slows, making ZLB a strong play during uncertain periods.
        • Interest rate environment – If rates remain high, stable dividend-paying companies in ZLB’s portfolio could remain attractive compared to fixed income.
        • Shift toward value investing – Investors moving away from expensive growth stocks may favor the relatively stable earnings of low-volatility companies.
        • Canadian market dynamics – With heavy financials and energy exposure in broad Canadian indexes, ZLB offers a different mix that may appeal to risk-averse investors.
        • Underperformance in strong bull markets – In aggressive market rallies, low-volatility stocks may lag behind higher-growth sectors.
        • Sector concentration – The ETF’s focus on specific defensive sectors could limit exposure to broader market gains.
        • Potential valuation concerns – Defensive stocks may become expensive if too many investors seek safety, impacting future returns.

        Canadian-listed U.S. stock exposure

        Vanguard S&P 500 Index ETF (TSX:VFV)

        VFV provides access to the S&P 500 without currency hedging, making it a strong option for long-term U.S. equity exposure.

        • Exposure to world-leading companies – Apple, Microsoft, Amazon, and other tech giants drive performance.
        • No currency hedging – Allows investors to benefit from a strong USD.
        • Long-term market outperformance – The S&P 500 has historically delivered solid returns.
        • Lower fees than many mutual funds (0.08% MER) – Cost-effective passive investment.
        • Broad diversification – Reduces company-specific risk across 500 stocks.
        • Tech sector performance – AI, cloud computing, and semiconductors influence returns.
        • U.S. Federal Reserve policy – Rate cuts could boost stock market valuations.
        • Corporate earnings growth – Stronger earnings drive stock price appreciation.
        • Currency fluctuations – A weaker USD could reduce CAD returns.
        • Overvaluation concerns – U.S. stocks may be expensive after strong rallies.
        • Recession risk – Economic slowdown could hurt corporate profits.

        Canadian-hedged exposure to U.S. tech giants

        BMO NASDAQ 100 Equity Hedged to CAD Index Series Units ETF (TSE: ZQQ)

        ZQQ tracks the NASDAQ-100 Index, providing Canadian investors with exposure to top U.S. technology and growth companies while hedging currency risk against the Canadian dollar. This ETF allows investors to benefit from leading innovation-driven firms without worrying about USD/CAD fluctuations.

        • Access to top-performing tech stocks – The ETF holds leading companies like Apple, Microsoft, and Nvidia, giving investors direct exposure to high-growth U.S. firms.
        • Currency hedging reduces FX risk – By hedging against CAD/USD fluctuations, the ETF ensures that returns are driven by stock performance rather than currency movements.
        • Strong historical performance – The NASDAQ-100 has outperformed many global indices over the past decade due to tech sector dominance.
        • Benefiting from AI and innovation trends – With AI, cloud computing, and semiconductors driving economic growth, ZQQ provides access to key players in these industries.
        • Diversified exposure within tech and growth sectors – While heavily weighted toward tech, the NASDAQ-100 includes firms in communications, healthcare, and consumer discretionary, broadening its impact.
        • Artificial intelligence boom – Companies leading in AI, such as Nvidia and Microsoft, are driving major technological shifts and revenue growth.
        • Interest rate impact on tech valuations – If central banks ease monetary policy, tech stocks could benefit from lower borrowing costs and higher valuations.
        • Earnings growth in big tech – Continued strong earnings from major tech firms could sustain investor confidence and price momentum.
        • Consumer and enterprise tech adoption – Rising demand for cloud computing, e-commerce, and digital services supports long-term NASDAQ-100 growth.
        • High valuations and volatility – Tech stocks can be expensive, leading to sharp corrections during market downturns or economic uncertainty.
        • Regulatory scrutiny – Increased government oversight on data privacy, AI development, or monopolistic behavior could impact key holdings.
        • Sector concentration – The ETF is heavily weighted toward technology, making it susceptible to sector-specific downturns.

        Global diversification beyond North America

        Vanguard FTSE Developed All Cap Ex North America ETF (TSX:VIU)

        VIU provides exposure to developed markets outside North America, including Europe, Asia, and Australia. It includes companies across all market capitalizations, offering a broad and diversified approach to international equities.

        • Diversification beyond Canada & U.S. – VIU helps investors reduce home-country bias by adding European and Asian equities. These markets may offer opportunities not available in North American indices.
        • Exposure to global industry leaders – Holdings include major firms like Nestlé, Toyota, and Samsung, providing access to multinational corporations with strong market positions.
        • Cyclical vs. defensive balance – Unlike the U.S.-heavy tech concentration, VIU provides exposure to sectors like industrials, consumer staples, and healthcare.
        • Currency diversification benefits – Investing in international equities can help protect against CAD weakness and provide returns in various global currencies.
        • Potential for value investing – Many European and Asian stocks trade at lower valuations compared to U.S. stocks, offering long-term growth opportunities at reasonable prices.
        • European economic recovery – Stabilizing inflation and stronger consumer demand could boost European stocks.
        • Asian market growth – Economies like Japan and South Korea are seeing increased tech and manufacturing activity, benefiting stocks in these regions.
        • Currency movements – The CAD’s strength or weakness relative to the euro, yen, and pound can impact returns.
        • Geopolitical risks – Trade tensions, war, and policy changes in Europe and Asia may affect performance.
        • Slower economic growth – Some international markets have lagged the U.S. in GDP and stock market growth.
        • Currency risk – Unhedged exposure means currency fluctuations can impact returns.
        • Regulatory & political uncertainty – Different legal and tax environments could affect investments, especially in the EU and Asia.

        Core Canadian bond exposure

        BMO Aggregate Bond Index ETF (TSX:ZAG)

        ZAG tracks a broad mix of Canadian government and corporate bonds, offering exposure to short-, medium-, and long-term fixed income securities. This makes it a strong choice for portfolio diversification and stability.

        • Portfolio risk reduction – Bonds provide a hedge against stock market volatility, making them essential in a balanced portfolio.
        • Higher yields in a rising rate environment – With interest rates elevated, bond yields are more attractive compared to recent years. ZAG provides exposure to a mix of high-quality government and corporate debt.
        • Blend of short-, mid-, and long-term bonds – The mix of different maturities balances risk and return, providing steady income while managing interest rate sensitivity.
        • Low-cost fixed income option – With a management fee of just 0.09%, ZAG is a cost-effective way to gain exposure to the bond market.
        • Defensive position for uncertain markets – Bonds tend to perform well when equities struggle, making ZAG a strong hedge during economic downturns.
        • Bank of Canada rate policy – Future rate cuts could lead to capital appreciation for bonds.
        • Inflation trajectory – Lower inflation would support bond prices and improve real returns.
        • Economic slowdown risks – If growth weakens, demand for safer assets like bonds may rise.
        • Corporate debt outlook – Credit spreads and default risks should be monitored in corporate bond holdings.
        • Interest rate fluctuations – If rates remain high for longer than expected, bond prices could be pressured.
        • Inflation impact – Rising inflation reduces the real return on fixed-income investments.
        • Corporate bond exposure risks – While ZAG is primarily government bonds, credit risk still exists in corporate allocations.

        What about a robo-advisor?

        Investors can easily purchase a basket of ETFs through a special financial advisor. These asset managers are called Robo-advisors, and they use software to help uncertain investors build a portfolio full of low-cost ETFs while maintaining a suitable asset allocation.

        Essentially, it’s a financial advisor without spending time with a human. Wealthsimple has surged to the top of the robo-advisor world, winning over customers with low overall fees, good customer service, and many other financial products under one roof. 

        The industry has gone from a few dozen ETFs to thousands, with multiple ETFs tracking almost every conceivable index. Investors can use ETFs to get direct exposure to just about any country’s stock market or use them to invest in specific types of stocks or various other strategies.

        Some popular choices include dividend stocks, covered call strategies, or exposure to other countries in a currency-hedged fashion. Some ETFs even allow investors to make leveraged bets on various asset classes, like crude oil or NASDAQ stocks, for those who want to get interested.

        ETF providers 

        There are more than a dozen companies in Canada that provide ETFs. Still, in reality, the sector is dominated by a handful of names. 

        The largest is BlackRock, which has quietly grown to be the top ETF provider in North America and one of the largest asset management companies worldwide. It had US$8.59 trillion in assets under management at the end of 2022, spread out over dozens of different countries. Its ETFs are marketed under the iShares brand name. Many of Canada’s largest ETFs are managed by BlackRock. 

        Next is Vanguard, the non-profit passive investing giant started by John Bogle in 1974. Vanguard’s funds are entirely owned by its customers, with this non-profit approach critical in keeping fees as low as possible.

        It had approximately $8 trillion in worldwide assets under management at the end of 2022. Vanguard has only operated in Canada for a little longer than a decade but has grown to the point where it threatens BlackRock’s leadership status. 

        Another big ETF provider in Canada is the Bank of Montreal (BMO), which expanded away from mutual funds and into ETFs in the early 2010s. BMO is the leader in more specialty funds, focusing on more niche areas of the market rather than going up against BlackRock and Vanguard directly.

        If, for example, you’re looking for an ETF that tracks junior gold companies, BMO likely has it — and at a pretty reasonable fee, too. It also does a pretty good job of providing mainstream ETFs at costs comparable to its two larger competitors. 

        There are a number of other ETF providers in Canada. Still, they mostly focus on niche areas that the three main providers don’t cover. Some of these ETFs are useful; we’ll even profile one or two. But, for the most part, investors should stick with big ETFs provided by the leaders in the sector. Leave the specialty ones for those who want to use them as a substitute for active investing. 

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