Best ETFs in Canada for 2024 - MoneySense (2024)

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ETFS

By Michael McCullough on May 23, 2024
Estimated reading time: 5 minutes

Back for the 12th edition, the top exchange-traded funds among Canadian, U.S., international, fixed income and all-in-one ETFs, and—fan favourite—desert-island picks.

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Best ETFs in Canada for 2024 - MoneySense (1)

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Exchange-traded funds (ETFs) offer Canadian investors a way to grow their money and diversify across multiple asset classes while paying minimal fees. All you need is a brokerage account and a bit of money to get started. In less than an hour, you can put together an investment portfolio that could perform as well as most professionally managed accounts.

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The trouble with ETFs, though, is abundance.

As of March 31, 2024, there were 1,129 ETFs from 40 fund sponsors trading on Canadian exchanges, according to the Canadian ETF Association. Together they held around $423 billion in assets under management.

Our objective all along with this annual “Best ETFs” report—now in its 12th edition—has been to narrow down the list of options for do-it-yourself investors to construct a well-diversified, low-fee portfolio that will likely perform as well or better than most professionally managed ones. This year we enlisted 11 professional advisors, financial planners, investment analysts and bloggers from across Canada to nominate and judge what they consider the best ETFs in seven categories. They looked for attributes including appropriate exposure to the asset class or category, low management fees, high liquidity (low bid/ask spreads) and close tracking to the indices they cover.

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The best ETFs in Canada—the 2024 edition

wdt_ID	Fund name	Ticker	Management fee	MER	Holdings	Description	Category
1	TD Canadian Equity Index	TTP	0.04%	0.05%	278	Tracks Solactive Canada Broad Market Index; v. low fees	Canadian equity
2	Vanguard FTSE Canada All Cap Index	VCN	0.05%	0.05%	177	Exposure beyond S&P/TSX Composite to small caps, low fee	Canadian equity
3	iShares Core S&P/TSX Capped Composite Index	XIC	0.05%	0.06%	229	Limits the chance of mega-caps dominating the index (weights capped at 10%)	Canadian equity
4	BMO S&P/TSX Capped Composite Index	ZCN	0.05%	0.06%	225	Similar to VCN, but with a wider selection of holdings	Canadian equity
5	Vanguard U.S. Total Market Index	VUN	0.15%	0.17%	3	Exposure to a huge number of stocks for a slightly higher fee	U.S. equity
6	iShares Core S&P U.S. Total Market Index	XUU	0.07%	0.07%	2	Low fees, broad diversification, low tracking error	U.S. equity
7	TD U.S. Equity Index	TPU	0.06%	0.07%	497	Tracks Solactive index with very low turnover	U.S. equity
8	iShares Core MSCI EAFE IMI Index	XEF	0.20%	0.22%	2	Wide diversification, low tracking error	International equity
9	Vanguard FTSE Developed All Cap ex-North America Index	VIU	0.20%	0.23%	3	Wide market exposure, unhedged	International equity
10	BMO MSCI EAFE Index	ZEA	0.20%	0.22%	777	Similar to XEF with competitive fee	International equity
11	BMO Aggregate Bond Index	ZAG	0.08%	0.09%	1	Low fee, weighted duration 7 yrs	Fixed income
12	TD Canadian Aggregate Bond Index	TDB	0.07%	0.08%	1	Tracks Solactive Broad Canadian Bond Universe TR Index, avg 6.9 yr duration, 4.2% ytm	Fixed income
13	iShares Core Canadian Long Term Bond Index	XLB	0.18%	0.20%	596	Tracks FTSE TMX Canada Long Term Bond index. Potential capital gain opportunity when interest rates decline	Fixed income
14	iShares Core Canadian Short Term Bond Index	XSB	0.09%	0.10%	632	Low fee, short duration fund (weighted avg 2.55 yrs) with lower duration risk	Fixed income
15	Global X 0-3 Month T-bill	CBIL	0.10%	0.00%	0	Holds A-1+ rated Canadian govt treasuries with avg 4.86% YTM, virtually no credit risk	Cash alternative
16	BMO Money Market Fund ETF Series	ZMMK	0.28%	0.13%	218	Holds bonds and notes <3 months to maturity, current yield 5.05%	Cash alternative
17	Purpose High Interest Savings Fund	PSA	0.15%	0.15%	3	Combo of HISA and T-bill assets, current yield 5.07%, decent liquidity	Cash alternative
18	Global X High Interest Savings	CASH	0.10%	0.11%	3	Holds deposits at Schedule 1 banks, current yield 4.81%, $4.8b AUM	Cash alternative
19	iShares Core Equity ETF Portfolio	XEQT	0.18%	0.20%	4	Global equity fund with low Canadian home country bias	One-decision
20	TD Growth ETF Portfolio	TGRO	0.15%	0.23%	5	Recently overhauled to focus on passive index ETFs, 90/10 equity/bond mix	One-decision
21	iShares Core Growth ETF Portfolio	XGRO	0.18%	0.20%	8	80/20 stock/bond mix	One-decision
	Fund name	Ticker	Management fee	MER	Holdings	Description	Category

Our methodology for the best ETFs for Canadian investors

With the addition of the cash ETFs category this year, we’ve divided our selections into seven categories that we think are all you really need to manage your own investment portfolio. On the equity side, we have separate categories for Canadian, U.S. and international stocks. Another category covers the best fixed-income funds, which hold bonds and sometimes preferred shares. There is the aforementioned cash category. And, for investors who’d rather not get into the weeds of portfolio construction and rebalancing of multiple funds, we have a category of one-decision ETFs (known in the industry as asset allocation or all-in-one ETFs) that cover all the bases.

We asked our panel to nominate their go-to ETFs in each category, from which we compiled a long list of candidates. We then had them vote yes or no to all of the funds on the lists. The top three vote-getters in each category (more in the case of a tie) made up our final “Best ETFs” selection presented here.

Finally, we challenged each of our judges to name one desert-island pick: an ETF that typically wouldn’t make it through our conventional filters but that they think are still worth a look. These are listed in a bonus seventh category.

There are, of course, many more ETFs out there (not to mention individual stocks) that you may choose to complement these core components in your brokerage account. But with these “Best ETFs” as your foundation, you won’t go too far wrong.

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Table of contents: Best ETFs for Canadian Investors

Best Canadian ETFs
Best U.S. ETFs
Best international ETFs
Best fixed-income ETFs
Best all-in-one ETFs
Best cash-alternative ETFs
Desert-island ETF picks

Meet the MoneySense “Best ETFs in Canada” panel

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Tony Dong is the lead ETF analyst for ETF Central, a partnership between Trackinsight and the NYSE. His work has also appeared in U.S. News & World Report, USA Today, TheStreet, MoneySense, The Motley Fool and Benzinga.

Best ETFs in Canada for 2024 - MoneySense (6)

Alain Guillot worked as a financial advisor, then decided to pursue entrepreneurship instead. He has maintained a personal finance blog, alainguillot.com, since 2013.

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Travis Koivula is an investment advisor with Aviso Wealth in Victoria. He helps small-business owners and executives make better financial decisions and live with fewer financial regrets. You can find him on LinkedIn and Instagram, where he posts about complex topics in simple language, using humour and easy-to-understand analogies.

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Mark McGrath is a financial planner and associate portfolio manager with PWL Capital. For the past decade, he has worked primarily with Canadian physicians and their families, helping them make sound financial decisions around portfolio management, retirement planning, tax planning, estate planning and risk management.

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Aman Raina is an investment coach and founder of Sage Investors. He teaches individual investors how to make successful investment decisions buying/selling stocks and ETFs.

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Yves Rebetez, CFA, is a partner at Credo Consulting, a brand analytics and research firm focused on the Canadian financial services industry. Rebetez ran ETFinsight between 2011 and 2018 and is now working on several ETF and advisor engagement initiatives, as well as working with Arbutus Partners, promoting “tomorrow’s managers… today.”

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Michelle Robertson is a financial planner, a CPA and the founder of wealth and financial planning company Ms. Money and Math. She simplifies money for women who want to multiply their net worth so they have the freedom to build a life they love.

About Michael McCullough

Michael is a financial writer and editor in Duncan, B.C. He’s a former managing editor of Canadian Business and editorial director of Canada Wide Media. He also writes for The Globe and Mail and BCBusiness.

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