5 Best Canadian ETFs to Buy in 2024

ETFs are a great tool for investors that want to invest in a particular market, but don’t want to deal with the hassle of researching individual stocks. Thanks to the diverse offering of ETFs on the market, practically any investor can find a product that will suit their investment needs.

In this article, we’re highlighting a diverse range of ETFs that allow investors to gain exposure to the Canadian market. Most of the ETFs we’ve selected invest in stocks, but we’ve also provided an option for those who want to invest in Canadian bonds.

The best Canadian ETFs to buy in 2024

Without further ado, let’s get right into our list of the best Canadian ETFs:

• Vanguard FTSE Canada All Cap Index ETF (VCN) – An ETF tracking the Canadian equities market
• iShares Core S&P/TSX Capped Composite Index ETF (XIC) – Diversified exposure to the Canadian equities market
• Vanguard Canadian Aggregate Bond Index ETF (VAB) – An ETF for investors looking to diversify their portfolio with Canadian bonds
• BMO Equal Weight Banks Index ETF (ZEB) – An ETF that provides exposure to the Canadian banking industry
• iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ) – A Canadian ETF for investing in dividend stocks

1. Vanguard FTSE Canada All Cap Index ETF (VCN) – An ETF tracking the Canadian equities market

The ETF we’re featuring first is the Vanguard FTSE Canada All Cap Index ETF, which is designed to track the FTSE Canada All Domestic Index, a market capitalization-weighted index that measures the performance of Canadian large and mid cap stocks. As of December 2024, the index had 49 constituents.

VCN is a passively managed fund with a very competitive expense ratio of 0.05%. This makes it a great option for investors who want to invest in the Canadian stock market over a longer time period. 

At the time of writing, the fund has just over C$6 billion in assets under management. VCN’s largest holding at the moment is the Royal Bank of Canada, with a weight of 6.58%. The most represented sector in the index is financial services, with energy and industrial coming in second and third place, respectively. 

• Name and ticker: Vanguard FTSE Canada All Cap Index ETF (VCN)
• Expense ratio: 0.05%
• AUM (as of Jan 2024): C$6.1 billion
• Biggest holding and weight (as of Jan 2024): Royal Bank of Canada (6.58%)

2. iShares Core S&P/TSX Capped Composite Index ETF (XIC) – Diversified exposure to the Canadian equities market

Another contender for obtaining broad exposure to the Canadian stock market is the iShares Core S&P/TSX Capped Composite Index ETF (XIC), which tracks the performance of the S&P/TSX Capped Composite index. This index covers roughly 95% of the Canadian equities market, and is commonly used to measure the performance of Canadian companies listed on the Toronto Stock Exchange.

The XIC ETF is passively managed and designed to be a long-term holding. Given the index tracks, this ETF is a very solid option for investors who want diversified exposure to the Canadian equities market. 

The XIC ETF has a low expense ratio of 0.06%. The fund’s largest holding is the Royal Bank of Canada with a weight of 5.91%. At the time of writing, XIC has C$10.89 billion in assets under management. 

• Name and ticker: 
• Expense ratio: 
• AUM (as of Jan 2024): C$10.89 billion
• Biggest holding and weight (as of Jan 2024):

3. Vanguard Canadian Aggregate Bond Index ETF (VAB) – An ETF for investors looking to diversify their portfolio with Canadian bonds

Now, let’s briefly turn our attention away from equities and take a look at the Vanguard Canadian Aggregate Bond Index ETF (VAB), which seeks to track the Bloomberg Global Aggregate Canadian Float Adjusted Bond Index. 

The VAB fund’s largest holdings are Canadian government bonds, followed by bonds issued by the province of Ontario. As a bond ETF, the fund holds bonds with varying maturity dates, and pays interest on a monthly basis.

If you’re looking to invest in Canadian bonds, the VAB is one of the best ETFs for the job. It has an expense ratio of 0.09%, so the fees won’t eat into your overall investment results too much. At the time of writing, VAB has an AUM of C$4.4 billion.  

• Name and ticker: Vanguard Canadian Aggregate Bond Index ETF (VAB)
• Expense ratio: 0.09%
• AUM (as of Jan 2024): C$4.4 billion
• Biggest holding (as of Jan 2024): Canadian government bonds

4. BMO Equal Weight Banks Index ETF (ZEB) – An ETF that provides exposure to the Canadian banking industry

The BMO Equal Weight Banks Index ETF (ZEB) is an exchange-traded fund that allows investors to get exposure to the Canadian banking sector. 

The ETF tracks the performance of the Solactive Equal Weight Canada Banks index, which currently contains 6 Canadian banks. According to the issuer, the fact that the ZEB ETF tracks an equal weighted index makes it less vulnerable to security-specific risks. 

The ZEB index has a 0.28% expense ratio, which is higher than the ETFs we’ve featured in this article so far. However, it’s not too uncommon to see higher fees by ETFs that are focused on a particular sector rather than the equities market at large. 

At the time of writing, the ZEB ETF has an AUM of C$3.8 billion. Its holdings include Canadian Imperial Bank of Commerce, Bank of Montreal, Royal Bank of Canada, National Bank of Canada, Toronto Dominion and Bank of Nova Scotia. 

• Name and ticker: BMO Equal Weight Banks Index ETF (ZEB)
• Expense ratio: 0.28%
• AUM (as of Jan 2024): C$3.8 billion
• Biggest holding (as of Jan 2024): Tracks an equal weighted index

5. iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ) – A Canadian ETF for investing in dividend stocks

The iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ) is an ETF that focuses on investing in high quality Canadian companies that pay dividends. 

The benchmark index that the fund is designed to track contains companies that have paid out stable or increased dividends every year for a period of at least five years. The index’s constituents are weighed based on their indicated yield. Currently, the index has 90 constituents. 

The CDZ ETF is a compelling choice for investors that would like exposure to the Canadian market but prefer to invest in companies that pay good dividends. At the time of writing, the fund has an AUM of C$895 million and its biggest holding is Aecon Group. 

• Name and ticker: iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (CDZ)
• Expense ratio: 0.66%
• AUM (as of Jan 2024): C$ $895.4 million
• Biggest holding and weight (as of Jan 2024): Aecon Group (3.10%)

The bottom line

Hopefully, our article gave you a good overview of the different types of ETFs available for those that want to invest in the Canadian market. As you can see, there are ETFs that invest in the Canadian equities market as a whole, as well as ETFs that invest in a more specialized way, for example in the banking sector or dividend stocks. 

If you’re looking for more ways to explore ETFs, make sure to check out our article highlighting the best ETF screeners.