My Top Seven ETFs for Young Canadian Investors – Updated 2018

As usual when it comes to investing advice on this website, I should admit right up front that I have no letters behind my name that are related to financial fields of study, so feel free to verify any advice that you read on specific recommendations.

There is no way to determine what specific ETFs are best for your portfolio without knowing a whole lot about you and your circumstances (hence the whole idea of going to a financial planner).  What I’m looking for when I recommend an ETF is broad diversification and really low fees (MERs), with some consideration for what stock exchange they are on and what currency you purchase them in.  That’s about it.

My Top Seven ETFs for Young Canadian Investors

In recommending these seven ETFs I’m basically just using my own situation as the target group.  So essentially someone who is young, has a long investment horizon, a fair degree of risk tolerance, and plenty of room in their RRSP to stick US equities.

Editor’s Note: This became such a popular post on our site that we decided to update it in order to reflect the changing landscape of passive index ETF investing (aka “Couch Potato Investing”) in August of 2016.  You can check out the original ETF picks at the bottom of this article in order to see a few other options that are available, and to understand the evolution of ETF options in Canada.  I also cut down on the quantity of recommendations for simplicity’s sake, but feel free to do some research and recommend that I take a look at a new offering in the comments!  Finally, I’d be remiss if I didn’t mention that if you’re interested in a basic ETF portfolio, you should likely consider one of Canada’s robo advisors such as Wealthsimple and BMO SmartFolio.  These relatively new Fintech darlings are changing the way the financial management game is being played in Canada.


This ETF is a fantastic creation for Canadians by Vanguard: King of the passive investing world.  For an MER of .27% investors get great exposure to companies from an incredibly broad array of geographical regions, sectors, and overall sizes (small, medium, and large caps).  It tracks the FTSE Global All-Cap index, except that it takes out the Canadian portion.  What this means is that if you want the simplest of simple solutions, you can basically have a very diversified portfolio created for Canadian investors by allocating a certain percentage of your equity investments here, a certain percentage with VCN (the #2 ETF discussed below), and then a certain percentage in a vanilla bond ETF (see #3).  There is no need to re-balance a US ETF against an Emerging Market ETF and a European ETF in order to get your world-wide exposure.  

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VXC was created in June of 2014 and quickly replaced my former #1 and #2 favourite ETFs, which you can look back at near the end of this article.  The reason for this switch was that Vanguard produced an option that allowed Canadians to get broad market exposure at a relatively low MER in Canadian dollars.  US-market ETFs such as VXUS are still slightly cheaper in terms of MER, but there are several advantages to keeping your money in CAD with this TSX-listed ETF.  You can still slice a few hundredths of a percent off of this ETF if you break it down into its component parts and re-balance it yourself (i.e. a specific percentage for Asian stocks, US stocks, Euro stocks, etc).  It just isn’t worth my time to go through all that, and for most people the trading costs and time management considerations will strongly recommend this ETF as a cornerstone of their portfolio.  (XAW) is a very similar product with a slightly lower MER (.22%), but it does not include a certain exposure to China that I like to have.  Also, I enjoy supporting Vanguard since they are the original player in index investing.  If you’re interested in the nitty-gritty details, check out the ETF’s fact sheet here.

Top 7 ETFs

You wanted Canada, Vanguard gave you Canada.  This ETF replaces my former choice (XIC) from iShares because it is cheap (now only .06% MER) and gives me slightly broader exposure.  While there is at least one ETF that gives Canadian TSX 60 exposure at a slightly cheaper MER (.03%), VCN is my choice because it allows me to easily invest in smaller Canadian companies as well.  I like the balance that it gives my overall portfolio since the top 60 stocks in Canada tend to be clustered around a few industries.  Overall, there is not a huge difference between (VCN) and (XIU), so don’t panic and go out and sell all of your (XIU) units.  If you want to buy (VCN) from here on out that’s a great choice, if you want to stick with XIU, that is a pretty good deal too.  Here is VCN’s fact sheet.

Top 7 ETFs

You get the impression that I dig Vanguard yet?  Look, the name of the company’s founder is John Bogle, and he’s pretty much the Godfather of this whole ETF/passive investing thing – so I’m cool placing my trust in that company.  (VAB) replaces (XBB) on this list because when it comes to bonds, MER points matter even more, and (VAB) just can’t be beat here at .14% MER.

This ETF gives you exposure to many different lengths of municipal, federal and provincial government bonds, as well as a healthy dose of investment-grade bonds from corporations in various sectors.  This makes it a perfect fit for the conservative part of your investing portfolio.  If you want more information on just what is in this ETF, here is the fact sheet.

Note: Most Canadian investors will be just fine with this three ETFs.  If they adjust them over time in order to keep their preferred balance, they will be quite far ahead (likely hundreds of thousands of dollars) of the majority of Canadians that are saving and investing for retirement through traditional options such as mutual funds.

Note: Below you can read the original post that reflects how I built my ETF passive investing portfolio back in 2011.  As more Canadians have jumped on the couch potato investing bandwagon, better options have become available to us – and at much cheaper prices!  This ate away at the advantages the ETFs below enjoyed.  Also, if you read our free ETF eBook you might have noticed that I liked US-listed ETFs at the time because of the great exchange rate that CAD enjoyed with the USD.  Obviously that reality has changed (and in the exact manner I predicted it would by the way).

1) The FTSE Global All Cap ex US Index (VXUS)

This is my current favorite ETF because it is the cheapest way to get exposure to thousands of stocks outside of North America (getting North American exposure is relatively easy).  With a low MER of .16% you get to buy into companies of all sizes across the known world.  You hit all the buzzwords like “emerging markets”, “BRICS”, and “N11”.  I’m pretty sure that since Vanguard is set on being such a leader in the field, this will be a mainstay of my RRSP contributions for years to come.

2) Vanguard Total Stock Market ETF (VTI)

My Top Seven ETFsVTI makes the perfect complement to VXUS since it tracks the entire USA stock market.  I really like the exposure you get to small cap stocks (as opposed to basic, vanilla S&P 500 ETFs).  Some people would argue for an overweighting of small-cap stocks in both the global and North American markets since that sector has traditionally seen higher rates of return as a group than more mature, higher-cap stocks have.  For me, the higher MERs associated with smaller-cap only ETFs, and the slightly more headaches involved with balancing that sort of equity, are not worth my time at this stage of my net worth.  VTI keeps things simple, gives great exposure, and all for the extremely low “price” of a .05% MER!

3) FTSE Canada All Cap Index ETF (VCN)

This is the cheapest “all-stock” ETF that tracks the Canadian market.  Alternatively, you can shave off a few MER points and only track the large-cap companies in Canada, and essentially you’ll probably end up pretty close to the same place.  Either way you’re basically putting your money into the whole Canadian market.  With a MER of .12%, I believe this ETF will slowly start to steal market share from the #4 option on this list.

4) iShares S&P/TSX 60 Index Fund (XIU)

The granddaddy of index ETFs in Canada.  The big reason this ETF is on the list as the main competitor to VCN (see above) is that it is simply much more liquid.  With many times more units on the market and a long track record, some people will just be more comfortable with this ETF.  The biggest reasons I prefer Vanguard’s offering to this iShares “classic” (to be considered a classic in the Canadian ETF market you don’t exactly need to be ancient) is the slightly lower MER (.12% vs .18%) and the fact that XIU only tracks the 60 largest companies in Canada as opposed to the bigger market.  That being said, those 60 companies are pretty closely correlated with the entire market (because they are such a large part of it) so you really can’t go too wrong either way. Either VCN or XIU are great choices to put in your TFSA account.

5) The iShares DEX Universe Bond Index Fund (XBB)

Bonds aren’t really my thing as a young person with a defined benefit pension plan.  I’ve got a post in the pipeline queue (pipelines and Canada aren’t exactly a great mix at the moment) about why this is.  That being said, if you’re looking for bond exposure in Canada people smarter than myself really like this route.  Rather than sinking your cash into one or two government-only options, this ETF gives you exposure to many different lengths of municipal, federal and provincial government bonds, as well as a healthy dose of investment-grade bonds from corporations in various sectors.  Maybe not the best bet right now (the ETF won’t do great in a rising interest rate environment) but certainly a great option for the more conservative part of your asset allocation.

6) Vanguard U.S. Total Market Index ETF (VUN)

Why in the world do I want another U.S. total market ETF in my portfolio when I’ve already recommended one with an ultra-low MER above?  The reason this one makes the list because some investors are hesitant to purchase stocks on the New York Stock Exchange because of the currency risk.  I’d argue that it would be very difficult for the Canadian Dollar to get much higher than it has been the last couple of years, but that currency market is notoriously difficult to predict.  If you want to keep your money in CAD, and want to stick with the Toronto Stock Exchange, this ETF offers a Canadian-hedged product  that will protect you a little from crazy forex swings.  It’s also a cheap way to get exposure to the world’s markets (many of those huge US companies are themselves diversified all over the planet – just think of Wal-Mart as one example).

7) Vanguard FTSE Canadian Capped REIT Index ETF (VRE)

“Land is the only thing God isn’t making more of,” my grandfather used to say.  Regardless of if this is factually true or not, the idea that a healthy portfolio should have some exposure to real estate is popular in many circles.  I think that most people will get enough indirect exposure to Canadian real estate through purchasing the ETFs listed above, but if you want to allocate a small part of your portfolio to owning real estate investment trusts (REITs) I won’t argue with you.

VRE appears to me to be the best option in this case.  As one of Vanguard’s relatively new Canadian products it doesn’t have a ton of net assets yet, but it’s MER of .40% is the lowest amongst its closest competitors.  The 25% cap keeps any one trust from dominating the market share.  I think an argument could be made for simply looking at the holdings of this ETF and simply directly investing in the top 5-10 and avoiding MER fees altogether, but this is a very simply, couch potato solution to getting REIT exposure in your portfolio without thinking about it too much.

If you’re thinking about heading down the DIY investing path, make sure and check out our Questrade Review as it is our preferred discount brokerage (mainly because it allows you to buy ALL ETFs – including the ones listed here for free).

What mix of these do you currently have in your portfolio?  Are there superior options I might have missed somewhere?

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Kyle is a high school humanities teacher by day, and freelance personal finance author by night. He has been published in academic journals, and has also co-authored the book "More Money for Beer and Textbooks". In his free time Kyle likes to limp up and down a basketball court and pretend to be a tough guy in a boxing ring.


  1. BeachBoy on November 18, 2013 at 10:35 am

    To my view / portfolio:
    1) Instead of VXUS I have SCHF (MER 0.09% which is much less than 0.16$)
    2) I also have VTI, a major part of my portfolio
    3 & 4) I have XIC to track the S&P/TSX index
    5) XBB is also in my portfolio
    6) I don’t mind being on the NYSE so no use for me
    7) I have ZRE, which is equal weight, which is even more “severe” than the cap option. I also have SCHH for the US REIT side.

    I also have ZRR (Real Return Bonds) in my low risk part.

  2. Phil on November 18, 2013 at 6:51 pm

    I’m not into ETF’s unfortunately. I got into Mutual funds back a number of years ago and have been very happy with the returns I’ve had. That said, one of the ETF’s missing from your list is the Cdn banks – WEB. Others good ones I’ve considered include: CDZ, IWO, SPY, VIG, IBB. ETF’s are a good way to get broad coverage, but I still like individual stocks better for my personal situation, and honestly for the rush I get when I pick the ONE! – Cheers.

  3. Kyle on November 18, 2013 at 7:52 pm

    You don’t think you get enough exposure to the banks with the basic Canadian ETFs Phil? I mean they’re like a third of the index, would WEB be a little overboard?

  4. Kyle on November 18, 2013 at 7:57 pm

    Sounds like we’re thinking along the same lines BB.

    In response to 1) Those two ETFs aren’t equivalent. SCHF doesn’t have the small-cap exposure or the exposure to developing markets. I’ll happily give up a few hundredths of a MER point for access to those two key sectors.

    I’ve thought about ZRR, but with my pension plan I don’t feel that I really need that level of safety at this point.

  5. Phil on November 18, 2013 at 8:05 pm

    Maybe, and thinking about it probably, and also probably why I do not invest in ETF’s… That said, if I was to build a perfect portfolio of ETF’s I would probably look at building it using the 10-15 different sectors as my headers and owning an ETF for each sector, so that I could follow sector rotation as I input money… You know when tech stocks are turning around, I’d add to my tech ETF… materials, add to my materials ETF, etc… this is what I do with my stocks, so why not with ETF’s? Sorry, just think’n out loud. I really do prefer stocks, for my growth side, and Mutuals for my standard market side. Bissett cdn Equity fund has returned near 20% ytd, with a low MER of 1.18%… TSX is only up 8.5%… – Cheers.

  6. Kyle on November 18, 2013 at 9:30 pm

    I know using ETFs to play the sector rotation game is popular amongst a solid niche. It’s more a pure-sector play than trying to pick the specific companies that will outperform the sector itself as it enters its favorable point in the cycle. I just don’t trust the science behind some of the rotation theory. Some sectors stick out a little more than others for me, but I’m not familiar enough to commit yet. Same thing with mutual funds. There are undoubtedly some talented fund managers out there, but choosing them ahead of time has proven to be too tricky for almost academic study I’ve read. I just don’t trust my instincts yet in that area either. Perhaps when I have little more free capital to play with. Just out of curiosity Phil, how do you do versus the mutual funds you often pick?

  7. Phil on November 18, 2013 at 10:35 pm

    Bissett Cdn Equity fund – +19.5% ytd
    PH&N Dividend fund – +14.8% ytd
    My main stock account (14 holdings)- +16.6% (since June 1st, since consolidated many other investments to one account)
    My TFSA (5 holdings) – -1% ytd(This is my play account, and where I put my high risk plays, and in March I made 2 gambles that did not play out well…)
    My wife’s TFSA (7 stocks) – +26% ytd

    So looking back I beat the mutual +5 to +7%. First 2 years I was about flat, and ever since I’ve been increasing my gain… is it worth it, for me yes, I’m young, have capital, no debt and time.

  8. BeachBoy on November 19, 2013 at 5:35 am

    I haven’T thought about that, but I also have a corporate plan with mutual funds. Although I have the riskiest of their “settings”, they already have a safe portion of the portfolio.
    Now you are making me think of dumping the two bond funds, and maybe open emerging markets (standalone ETF instead of merged into VXUS)

  9. Bet Crooks on November 19, 2013 at 3:26 pm

    I like PH&N bond funds. We have a good one available through our work defined contribution plan which has a lower MER than available on the street. They seem to have a team that really understands how to play the game given the wild swings bonds have gone through in the last 4 years, especially in May/June.

    For a new investor with no DB, I think I’d suggest they just sink their fixed income percentage in short term GICs (1-2 years) until things calm down a little. Bonds could sink a bit over the next few years if they cut back on QE. And GICs will go up if rates go up, so locking in for 3-5 years at today’s pitiful rates wouldn’t suit me.

  10. Kyle on November 19, 2013 at 7:03 pm

    Bet, why would you go with fixed income products if the person is a new investors and presumably young? Timing the market doesn’t work for about 99.99999% of investors.

  11. Kyle on November 19, 2013 at 7:07 pm

    Yup looking at getting exposure to emerging markets is probably a good idea from what I can tell. A government pension is pretty much as safe as you can get so I’m happy with that part of my portfolio!

  12. Kyle on November 19, 2013 at 7:09 pm

    Interesting. Thanks for being so upfront about your successes and your not-so-successful picks. I like the voyeuristic part of watching active management (like watching poker) but don’t trust my own portfolio yet!

  13. Phil on November 19, 2013 at 7:13 pm

    my 2 gambles were AM-T and WIN-T, both resulted in a combination of bad time of buy and ultimately my decision to cut losses at wrong times… Lesson learned! – Cheers.

  14. Bet Crooks on November 19, 2013 at 9:19 pm

    Well, we are new investors (to the stock market) since about 3 years ago (not counting DC pensions) and we’re much closer to retirement than to starting out, so I’m not sure I agree with the “presumably young” part….

    I think all portfolios should have a fixed income component. The % is up to the investor of course. Having lived through more than 3 major stock market crashes, I know many people who stopped investing in the market out of fear after losing a huge amount of their portfolio because they didn’t have a fixed income counterweight to catch them. (Remember you also can’t “buy low” if you have no cash.)

    I’m not sure where the market timing comes in to my comment? I would agree with investing steadily over time in low cost ETFs (or mutuals if you can’t get ETFs for some reason) that capture as close to the whole market as possible. That’s what I’d do with the Equity % of a portfolio. For e.g. even though the market is really up right now, we’re still buying market ETFs at the same pace.

    For the fixed income part there’s really only a couple of choices: GICs, cash, money market, and bonds. (Preferreds and the like are actually varied income not true fixed.) I guess putting new money into GICs instead of straight into bonds is a type of market timing. But I’ve never seen a case before where interest rates have been kicked down so long and so hard. I’d feel guilty suggesting someone start buying a bond fund right at this time unless they had no choice. (e.g. some DC plans) GICs aren’t as flexible as bonds but they have always been a part of our portfolio (most of it in fact) and they’ve done very well by us. We’re ultra conservative and would rather sleep easily than try to maximize our return.

    I hope this has clarified my view and not just made it murkier!

  15. Kyle on November 20, 2013 at 9:03 pm

    This makes a lot more sense Bet. I misunderstood a few things. I tend to default to the opposite end of the spectrum from you I guess as a someone with a long investment horizon pension and someone with a pension that can take care of their “fixed income” part of the portfolio. It makes sense now. I often find myself arguing for a higher allocation of equities than most are comfortable with…

  16. Phil on November 20, 2013 at 10:15 pm

    Higher allocation of equities… You and me both. I consider our “fixed income” portion to be our owned primary and secondary residences (which make up about 40% of our net-worth interestingly enough – right they say % fixed equal to your age…)with everything else in equities… let it ride baby! We sleep comfortable at night because we own the 8 walls and 2 roves that protect us at night – Cheers.

  17. barwelle on November 22, 2013 at 12:12 pm

    Kyle, I’m afraid there is an error in your in your post. Vanguard’s VUN is NOT hedged. VUS is the hedged version of VUN.

    Fun fact, neither ETF invest directly into the US market. Vanguard takes your money, exchanges it for US$, and “buys” units of VTI with it.

  18. Kyle on November 22, 2013 at 8:46 pm

    You are completely right Barwelle, it is not CAD-hedged, it is only available to be purchased in CAD funds.

  19. Mat on November 24, 2013 at 5:39 pm

    Great article! I’ve been looking at some of these ETF’s for the new year as I will be looking to do some restructuring of my accounts, very good information!. As a young investor, my biggest concern now is asset allocation for each account. For example, should I be looking at individual stocks for my TFSA, RRSP, or, where and which ETF’s are the best play for long term and short term? Should I be looking at income investing for my TFSA or growth? If you could provide me with some tips and/or advice regarding the issue, I’d greatly appreciate it! Thanks, Mat

  20. Kyle on November 24, 2013 at 10:38 pm

    Hey Mat,

    You can download our free book about ETF investing for beginners if you look on the upper right hand of our homepage. As a general rule, look at putting ETFs or individual stocks from the NYSE in your RRSP and CAD-listed ones in your TFSA if you’re looking to invest in both from the long term. Throw out all of that crap about growth vs income, most of it is all fancy terminology to describe some pretty basic stuff. Take a look at the book and let us know if you have any questions! Thanks for stopping by.

  21. What on January 5, 2014 at 7:27 am

    […] Mark, your readers can check out my favourite investment products and why I like there here. […]

  22. Ferd on February 16, 2014 at 5:56 am

    I would just have one question/comment on using VXUS. The principle of using just one ETF to get your whole international exposure is great, but doesn’t it minimize the power of rebalancing. If, say, emerging markets are down, the index would have a lower exposure to them, which contradicts the buy low/sell high ideology. I guess this depends on how the index is computed, but I would think that holding a separate emerging and developed international etf would offer upside with rebalancing, unless this is what VXUS does within its fund?

  23. Kyle on February 16, 2014 at 8:54 am

    VXUS would do this within the fund Ferd. It has a certain exposure % for emerging markets. So if they went down, it would buy more shares. That being said, you could obviously micro-manage your exposure to specific emerging markets by using more niche ETFs if you wanted to. I just think there is a lot of value in keeping it simple for most people.

  24. Ferd on February 16, 2014 at 10:05 am


  25. Ferd on August 3, 2014 at 12:48 pm

    With VXUS having 7.5% of its assets in Canada, are 7.5% (or the exact amount) of the distributions treated as eligible dividends and also forego foreign withholding taxes? Or since it’s a US ETF they don’t bother going through this procedure?

  26. Kyle on August 4, 2014 at 9:05 am

    That I’m not sure on Ferd, since I still have plenty of room in my RRSP for US-listed ETFs so it’s not a worry for me. I would assume that because it’s a US ETF you’re guessing right.

  27. Ferd on August 4, 2014 at 11:23 am


  28. Andre on March 31, 2015 at 12:06 pm

    Hi Phil, your think’n out loud comment caught my attention. I am thinking of this strategy of owning ETFS for each sector for a while now. It seems like a solid play and also a great way to hedge your self from one sector to the next.
    But, I cant pull the trigger on this play yet. Call it foolish but I feel like the experience is similar to going out for sushi.(stay with me on this)
    I like to choose and buy the rolls of sushi I want from the list. However, some people don’t want to bother with the menu and go with the chef selection of 20/30/40 rolls. In the latter case you get screwed with a bunch of avocado filled rolls at the same price as you would pay for some awesome salmon, tuna or lobster rolls. Anyways, sorry to digress with the sushi analogy. But I feel like its the same thing with ETFs. I’d rather buy and position myself with the sectors I like and not get stuck with an index fund full of avocado rolls. You know what I mean?

    Anyways, I would really appreciate all of your opinions/resources/anecdotes/advise on this style. Maybe we can outline some pros and cons.
    All the best


  29. Kyle on April 3, 2015 at 6:24 pm

    Thanks for commenting Andre. Have you done any research into how successful most people are when it comes to using sector-based investing? It’s a lot harder than one thinks, and those ETFs full of “mediocre sushi” have done pretty well over the last several decades!

  30. Grant on May 31, 2015 at 6:07 am

    I don’t think that’s correct, Kyle. The ETF is cap weighed, it doesn’t keep a certain % of emerging markets. If emerging market go up from 20% to 25%, that’s what it is. If you want to capture a rebalancing bonus, you need to to own an international and emerging markets ETF, such as XEF and XEC.

  31. Grant on May 31, 2015 at 6:32 am

    Bet, I wouldn’t feel guilty about suggesting someone buy a bond fund right now. So long as you hold a bond fund for it’s duration, you’ll get at least your money back (at least in nominal terms), in a rising interest rate environment as new bonds are bought at higher interest rates, resulting in higher income. Nothing wrong with GICs (you do get slightly higher income due to the illiquidity premium), but it’s great having the liquidity and bump up in price that occurs when equities crash (the “flight to safety”), for buying equities at depressed prices to rebalance. So for the young, long term investor, I’d go with VAB (lower MER than XBB, at only 0.19). I agree with you. Most people should have some fixed income to smooth the ride and help you stay the course.

  32. Master Nerd on June 10, 2015 at 12:40 am

    Hi Kyle,

    Nice list. Just wondering why you went for XIU vs XIC? The latter has a lower MER, higher yield, and lower portfolio turnover. I debated back and forth in the past, but the numbers just seemed a hair better for XIC. As you argue for VTI it’s important to have broad exposure to the whole market, and not just the S&P 500. To me, picking stocks based on market cap seems rather arbitrary. Also, why 60 and not 65 or 100 or 30? I’m sure there was some logic behind that number when the ETF was created, but basing success based on market cap alone seems a bit too simplistic. In any case, the performance of both is very similar, just curious about your logic for preferring XIU.

    I don’t have a pension (I might never), but I hold a small position in XBB just because bonds are one of those things everyone should have, but few younger people do.

    In terms of VUN vs VTI, from what I’ve read if you make smaller more frequent contributions, VUN is probably the better choice, since the forex fees will eat you alive otherwise. For VTI, if you’re doing bigger lump sums (>$10k at a time) your best bet is to do Norbit’s gambit to minimize forex fees. Depending on your portfolio, VUN might also be a good option if you’re trying to avoid the extra CRA paper work for having >$100k in foreign assets. To my knowledge, a Canadian listed ETF regardless of holdings wouldn’t trigger that requirement. There’s also the issue of considering what account you hold these in. VTI is a better choice for RRSPs since the distributions won’t be taxed as long as it’s in the account.

  33. Master Nerd on June 10, 2015 at 12:50 am

    I’m inclined to agree with you Kyle. Picking sectors is really not much better than picking stocks. Statistically, the odds are not in your favour over the long term (20+ years) with that approach. You’d basically be saying you are betting against armies of people with finance PhDs that do this day in day out that you know when to pick the right sector to buy/sell. I think keeping it simple and just buying the broad market is a much better option (at least that’s what the math and Buffett say).

  34. Kyle on June 10, 2015 at 5:15 pm

    Finance PhDs, super computers, and insider information…

  35. Kyle on June 10, 2015 at 5:20 pm

    The only reason I chose XIU over XIC is that when I wrote the column XIC had almost no volume. Then I just got lazy and decided to stay with the one I have. Canada’s stock market is even more top heavy than the USAs, so I’m pretty sure the returns will be almost identical over the long term.

    I’ve written about Norbit’s Gambit before as well. If you choose VTI inside of an RRSP it has added tax advantages over VUN as well (see witholding taxes and Canadian-listed US ETFs).

  36. Jozo on January 23, 2016 at 1:28 pm

    Hey Kyle,

    Thank you for your effort. You did really good job with this article and all your comments.
    So far i ve invested only within my RRSP and TFSA.
    My RRSP I have invested in TD e-series, I would like to know your opinion on investing in TD e-series beside ETFs and my TFSA I have invested in only one ETF and that is XIC. Could you please tell me your opinion on my portfolio. I think I should maybe try with at least one more ETF in my TFSA, any suggestions?

  37. Kyle on January 25, 2016 at 10:52 am

    Thanks Jozo. You sound like you’re on the right track. There is certainly nothing wrong with the TD eSeries. Rather than give a specific recommendation, I’ll point you towards some good resources so that you can evaluate it yourself:…ual-funds/ &…ue-simple/

  38. Jozo on January 25, 2016 at 7:24 pm


    Thank you once again for your instructive advise.
    I am definitely going to read those articles you recommended me.
    Also I will take this articles as yours affirmation of my assumption that I should consider including at least one more ETF in my TFSA portfolio.

  39. Che on May 3, 2016 at 9:16 am

    I think the “I

  40. Kyle on May 4, 2016 at 8:55 am

    We’re going to update this article in the new little while Che – stay tuned! Looks like it wasn’t a bad call though eh?

  41. Financial Canadian on June 26, 2016 at 4:26 pm

    Hey, great post!

    Wondering if you’ve ever considered investing in “exotic” ETFs? For example, a few that come to mind are:

    BMO Low Volatility Canadian Equity ETF (ZLB)
    BMO S&P/TSX Laddered Preferred Share Index ETF (ZPR)
    BMO Covered Call Canadian Banks ETF (ZWB)

    These are pretty unique investment solutions, and while I’ve never actually invested in any of them, I find them tremendously interesting.

  42. Kyle on June 27, 2016 at 8:41 pm

    I have looked at these and rejected them FC. I don’t think with the MERs they have that they will outperform my broad indexes over the long run (20+ years).

  43. Tito on September 2, 2016 at 1:13 pm

    Hi Kyle,

    great comments. I downloaded your book a couple of weeks ago, congratulations, I loved it! I had always been convinced about passive investment (I was fortunate to hear John C. Bogle discuss his view about this), but not until very recently I’ve had the chance to save (and invest).

    So here are a couple of (big?) questions for you:
    1) How do you recommend I start looking into which ETF to invest in? There seem to be a gazillion out there, so I am sort of lost and don’t know where to start. I have my money standing there, begging me to be invested in something! I could of course follow your lead and simply invest in what you have (we’re more or less in the same personal situation, I think), but I like being informed before making any decisions. Additionally, you mention which ETFs you’re investing in, but not what % of your portfolio each one represents. And this leads me to my second….
    2) How do I establish what part of my portfolio I should be investing in each ETF? This is particularly important for rebalancing (which I’m planning to do once/twice a year). Is there some sort of formula or logic? And finally…
    3) What is the criteria for deciding which ETF I should be investing in, in relation to the type of account I will be using? Right now I have the option of investing through my TFSA and my RRSP, but soon I’ll max them so I’ll just use a margin account at Questrade. So… is there some logic or best practice to follow to decide which one to use for a specific ETF?

    Thanks so much in advance.

  44. Kyle on September 4, 2016 at 3:40 pm

    Hi Tito, the short answer is this:…eir-place/ The longer answer will happen when I refresh this article in the next few weeks. Great job maxing out both of your registered accounts btw!

  45. James Hilton on September 20, 2016 at 10:29 pm

    Hi Kyle,

    Have really enjoyed your posts on the site. and also your ETF book. You have given lots of practical advice. I am new to investing and I was wondering if you could help access my situation.

    Firstly, I am young (23 years old). I have saved up about 44K right now and plan to save an additional 10K this year. Right now, I have maxed out my TFSA at 36.5K. The rest is sitting in a generic savings account. I am looking to buy my first home in approximately 1 year. The downpayment will be about 40K. Although I would like to save up for the long term, my current investment horizon is only 1 year since I need to have 40K with 100% certainty. Do you think I could execute your ETF strategy with a very large proportion in the fixed income ETF? Say, 75% fixed income and 25% with the other equity ETFs? My parents tell me not to take any risk and put my money into GIC’s. Do you think a 80% portfolio of fixed income is just as safe as a GIC?

    Thanks in advance!


  46. Kyle on September 21, 2016 at 8:25 am

    Hi James, fixed income is and GICs would be considered roughly equivalent in terms of risk in return. I’d look into putting 25 of the 44K in an RRSP account and then using the Homebuyer’s Plan for a downpayment. Nothing wrong with just going with basic GICs if you’re going to need the money right away James. I would stay from equity ETFs if you need the money in the next couple years. Cheers!

  47. Juan Aristizabal on September 22, 2016 at 8:02 am

    Great article thanks. I came across this post regarding the structure and effectiveness of VXC:…anada-vxc/

    What do you think about this statement: “foreign withholding taxes would add approximately 0.45% to the cost of the fund if it

  48. Kyle on September 24, 2016 at 9:11 am

    I’m a big fan of that site Juan and you’re right – it does add some extra expenses – but read further down where Dan talks about currency conversion charges when buying US-listed ETFs. There is a large advantage to keeping your money in CAD. Still, the greatest value by far is the simplicity of the set up in my opinion!

  49. WomanInvestor on September 25, 2016 at 12:59 pm

    Love your site!

  50. Kyle on September 26, 2016 at 3:10 pm

    Thanks, we appreciate it!

  51. Gavin on September 27, 2016 at 10:41 am

    I have decided to put my RSP into ETFs because my company mutual fund was charging a MER of 2%. I’m currently waiting for the funds to transfer to my questrade account but here is where my funds will be going.

    – Canadian Markets – VCN (30%)
    – .06% MER
    – American Markets – VUN (25%)
    – .16% MER
    – Canadian Bonds – VAB (25%)
    – .13% MER
    – International – XEF (10%)
    – .22% MER
    – Emerging Markets – VEE (5%)
    – .24% MER
    – Real Estate(REIT) – ZRE (5%)
    – .61% MER

  52. Kyle on September 28, 2016 at 11:31 am

    Makes sense to me Gavin. Do you have a re-balance plan ready to go? If you don’t paying attention to this, then you’re saving yourself a few points versus VXC for sure. It’s always about the balance between fee savings and workload to keep up the actual save & invest logistics.

  53. James on October 1, 2016 at 10:50 am

    Hi Kyle,

    Thanks for the great article and for the additional clarifications in your comments. The article seems to be a discussion of the merits between iShares and Vanguard ETF products. I wonder if BMO products (or others) were not included in the discussion, either because you find they don’t compete/compare or if there is some other reason.


  54. Camaro on October 2, 2016 at 10:55 am

    Hi Kyle, thank you very much for the effort you put into your website! It gave me the push to start my CP portfolio:
    VAB (20%)
    XIC (20%)
    XRE (10%)
    VUN (20%)
    XEC (15%)
    XEF (15%)
    Although the portfolio is currently small (5k), I think it’s a good start; will be pumping in more in the next few years. Given the MER vs. that of the TD e-series, I didn’t see a big difference.

    I noticed in the comments above, you commented that if you need the cash in a few years it’s best to put it in fixed income. So what ETFs should I be looking at? I plan to set aside some funds (different from this one) in preparation for my first child; 3 – 5 year timeline during parental leave. I would love your insight on the matter Kyle! Thanks for your time!

  55. Kyle on October 3, 2016 at 3:14 pm

    Fixed income right now is super boring Camaro. TBH I’d just recommending putting it all in an online bank high-interest savings account. It’s definitely a good idea to have some money in something safe like that in order to prepare for the chaos of the child bearing years!

  56. Kyle on October 3, 2016 at 11:02 pm

    Hey James, when you’re discussing basic vanilla index ETFs they’re all pretty similar. BMO either doesn’t have the specific product or they’re just a few points more expensive.

  57. pal vin on October 13, 2016 at 2:02 pm

    Hi Kyle,

    Thanks for your reply.
    How/ Where do i buy the Vanguard canadian ETFs.

  58. Kyle on October 13, 2016 at 2:42 pm

    You can buy them on the TSX using a discount brokerage Pal. I’d start here:

  59. Young Earner on October 27, 2016 at 9:20 pm

    Hey Kyle,

    Great article! Do you think that it’s still a good time to invest in index funds like vanguard S&P 500? How will the current recession affect it?

    Is something like the ZAG – BMO Aggregate Bond Index ETF a worthy investment right now?


  60. Kyle on October 28, 2016 at 8:33 pm

    Hi YE, as far as I’m aware the US is not in a recession, but has been steadily growing for a while? The truth is I have no idea where markets are going. We are essentially in an unprecedented situation right now as far as the world’s monetary and fiscal policies. At the best of times I’m not sure I could answer your question very well. I’m a dedicated index investor. I’ll let the sharks fight it out and be happy to take capitalism’s average over the long term. To answer your question, both the bond fund and equity fund that you mentioned will probably be ok investments over the next thirty years!

    Sorry I didn’t give you more of a silver bullet answer.


  61. Kate on November 19, 2016 at 9:37 pm

    Hi Kyle,

    Great article! We’re starting to put our portfolio together and I have a couple of questions:

    1) Timing. When exactly do you put your portfolio together? I pretty much know what I want it to look like in terms of diversification but when do I start buying? Stocks are on the upswing at the moment so it seems like a bad time to buy the ETF’s but it would beat cash just sitting around in my RRSP.

    2) In the comments you say “look at putting ETFs or individual stocks from the NYSE in your RRSP and CAD-listed ones in your TFSA if you’re looking to invest in both from the long term…”. Why is that?

    Thank you!

  62. Kate on November 19, 2016 at 9:49 pm

    Hi Kyle,

    Another question — when I looked at the fund facts for some of the TD-e series, a couple of things jumped out:

    1) Switch fee. Your representative’s firm may charge you up to 2% of the value of securities you switch to another fund.

    Is this true for all funds?!

    2) The trailing commission is an ongoing commission. It is paid for as long as you own the fund. It is for the services and advice that your representative and their firm provide to you. TDAM pays the trailing commission to your representative’s firm, including a discount broker. It is paid from the fund’s management fee and is based on the value of your investment. The
    rate is 0% to 0.25% of the value of your investment each year. This equals $0 to $2.50 each year for every $1 ,000 invested.

    Is this above and beyond the MER?

    3) The charts below give you a snapshot of the fund’s investments on May 31 , 201 6. The fund’s investments will change.

    How do you stay on top of the holdings in funds that have high turnovers? Or do you just keep an eye on returns and not worry about that?

    Speaking of high turnovers, I noticed that XIC has a 30.52 turnover versus 6.42 in VCN. But their performance seems pretty close — if XIC has to turnover more frequently to achieve the same performance as VCN, wouldn’t that indicate that VCN is a ‘cheaper’ option given the turnover costs that XIC is generating?

    Thanks – sorry, this was longer than I anticipated!

  63. Kyle on November 20, 2016 at 10:17 am

    Hi Kate,

    1) Not sure to be honest, I haven’t used TD for a long time tbh.

    2) In regards to trailing commissions – do you mean on the TD series or other mutual funds?

    3) I’m not too worried about the fund’s turnover at all because they’re tracking an index – I know that those companies will change. The turnover difference is likely due to the rebalancing policy in each fund. Those costs are included in the return of the fund. I’m not concerned about it for that reason. Long story short, both Vanguard and iShares/Blackrock know what they’re doing when it comes to ETFs.

  64. Kyle on November 20, 2016 at 10:28 am

    1) Kate, I can tell you that I know exactly what the markets will do from here: they’ll go up, or they’ll go down, or they’ll go sideways. If you decide that the math makes sense when it comes to index investing (it does) then you should embrace passive investing and not worry about bad time vs good time.

    2) It has to do with foreign witholding taxes Kate, stay tuned this week for a huge article we’re just finishing up on going into this in detail.

  65. Saud on December 25, 2016 at 1:08 pm

    Hi kyle,
    Thanks for such a wonderful informative article… i m new to canada and dont know much about financial markets here.. i want to invest 25k and found that etf are better option than mutual funds if u want to save commissions and fee expenses… i m also not aware of RRSP and TSA accounts and how can we manage funds in that accounts and what are the pros and cons of keeping ur investments in those accounts as compared to a brokerage account… can you please advise me some articles to understand the basics of investing in canada how and where to buy those etfs which u suggested?

  66. Kyle on December 27, 2016 at 2:59 pm

    Hello Saud, check our our free ebook here:

    And this article about RRSP vs TFSA accounts:

  67. EKG on January 18, 2017 at 1:38 pm

    Why not VFV? Returns 60%.

  68. Kyle on January 18, 2017 at 2:45 pm

    Past returns are no indicator of future results! Nothing wrong VFV, it’s just I get the same US Equities exposure in VXC.

  69. Barbara on March 16, 2017 at 1:07 am

    Great Articles, I am not young nor thrifty but have some questions! & apologize for the lengthy text in advance. I am 57 next month. When I lost my job 2 years ago (have new employment with very limited matching) but I had a DB that turned DC Pension RRSP Locked in that I took out to invest myself. About $90,000 sitting in cash waiting to be invested. I’ve been leary with the bullish market we are in to make a move but am
    losing out on monthly/quarterly distributions and feel a bit stuck to move forward. I wish I had invested when I thought to in the downturn of the market last February but was so
    busy with my new job it quickly went to the backburner. I also wish I bought Facebook stock at $18 when I thought to in Sept. 13, hindsight is 20/20!!
    I have a Questrade account with ETF’s mix of Vanguard & Ishares & some Company Stock from my former employer. All doing pretty well with good + % returns except for Ishares CBO (I have some XBB so may sell the CBO & add to my XBB holdings which are doing better) which has been a dud & some stock in Redknee which I’ll sit on until it comes back (if ever), not a huge issue. Live & learn. About $53,000 in investments there. Sunlife fund from DC about $16,500 that is low MER for actively managed fund through group work plan so I left it for now in one Med-High Risk Equity Fund. About $24,000 in TD E-Series & small bit in TFSA GIC. My question (s) is this; wondering whether to buy 10-20 individual dividend income stocks (Bank Stocks, utilities, Reit’s & blue chip/other) with my Pension Funds or keep it simple
    and buy 1-4 ETF’s to add to my already (my picks from reading various Couch Potato strategies were VCN, VUN, VAB, & possibly VDU) but suggestions seem to change so often! Even though I am fairly close to retirement I want a limited amount in fixed income funds only because I want a higher rate of return, if possible & have an investment horizon of hopefully 30 + years still. I may only hold ultimately about 20% of my portfolio in fixed income (maybe 25% & that may climb higher as I get older). I will be coming into some additional money to invest (about $100,000) so I can max out my TFSA to the tune of $50,000 which I haven’t to this point) pay off a little debt and have another $40,000 to invest in non-registered account/top up very small amount of unused RRSP room. Does it make sense to buy shortest term laddered GIC’s in that non-registered account? & any suggestions for the TFSA investments? All toled I should have about $260,000 invested before any additional savings over the next 10
    years or longer, but I am trying to simplify so rebalancing is easy & I do not overwhelm
    myself. I have read quite a bit about Dividend Investing and like the idea of creating an income stream from dividends, & so that I may not have to touch too much of my principle for quite some time into my retirement. My plan is to step up saving over the next 8-10 years until I retire, try for $10,000 a year now that my vehicle in great condition will be paid off in less than a year, save $5,000 until then and just roll
    those bi-weekly payments into an additional $5,000 in savings. I’ll
    set up to invest every 2 weeks when I get paid so will help
    with dollar cost averaging of purchasing any new funds. Was toying with the idea of a fee only based advisor to set me
    in the right direction. Any ideas as to someone who is trustworthy? I went to passive investing because I did not want to pay an advisor all the hidden fees to do not much or so they could buy a bigger boat! Any suggestions would be very much appreciated.

  70. Kyle on March 16, 2017 at 11:41 am

    Hey Barbara, a lot of questions there so I’ll try to sum up:

    1) I think a fee-only advisor would really help. I have three suggestions that I completely and fully trust. Chris Enns, Robb Engen, and Sandi Martin. Just Google them and read what they’ve written. You can decide for yourself if you’re a fan.

    2) I would not recommend you picking specific stocks or continuing the scattered approach that you’ve articulated. Check out our free eBook on ETF investing for why I believe this.

    Good luck!

  71. Stefan on August 9, 2017 at 6:02 pm

    For the 3 ETFs listed in the new section, how do I determine what balance to go with? Is there an article related to this here? Thanks!

  72. Kyle on August 12, 2017 at 9:51 am

    Check out our free ETF eBook Stefan!

  73. Allan on August 25, 2017 at 7:15 am

    Hi Kyle,

    How about the after tax returns of holding XIC versus VCN?

    XIC has a higher dividend yield. If held in a non-registered account, wouldn’t we be better off owning XIC?


  74. Kyle on August 25, 2017 at 12:27 pm

    They track slightly different indexes Allan. Essentially, what you’re doing is place a bet that the small- and medium-sized companies included in VCN will not outperform the larger companies-only offering of XIC.

    If you’re worried about taxes in a non-registered, I’d actually consider HXT as well.

  75. Allan on August 25, 2017 at 10:10 pm

    What is the difference between HXT and XIC?

    Which fund would be more tax efficient?


  76. Kyle on September 1, 2017 at 12:12 pm

    XIC has more holdings, HXT is very slightly cheaper, and has some interesting tax-efficiency features in non-registered accounts due to capital gains vs dividend tax treatments.

  77. Al on September 8, 2017 at 11:16 pm

    Leading institutions are not always the best for consumer. VCN has 2.5% dividends, XIC = 2.8%. XIC had near zero growth in 10 years – that’s Canada for you :). VCN is 3-years old, performs very similarly to XIC, I would not expect it to outperform XIC well enough to compensate for much lower dividend.

  78. Kyle on September 18, 2017 at 8:39 am

    May I ask what leads you to these conclusions Al?

  79. J-P Hunt on May 16, 2018 at 7:12 pm

    Hello Kyle,

    I followed you for a couple of months now and have read your ebook on ETF’s investing.
    I appreciated your update on your ETF’s recommendations.
    I understood that in your ebook you proposed a portfolio for the young investors and another one for near-retirement investors.
    Being retired for 3 years now, I am asking if you have a portfolio for retired people who are already pumping into their revenues while looking to see them improving as much as possible for the time left?

    Thanks again for all your feedbacks to all, they give the light to understand the “why”, “when” and “how” that are often missing from others.

    Quebec retiree

  80. Kyle on June 3, 2018 at 11:22 am

    Hi JP. Thanks for the kind words! Basically, I’d just recommend a higher percentage of fixed-income as you approach retirement. So a bond ETF would likely be your best bet (or perhaps a HISA if you want to be ultra safe). It really depends on several different goal and cash flow variables.

  81. Ronaldo on January 2, 2019 at 11:03 am

    Canada is the end of a toothpick in the total picture of markets – therefor the main rational for investing in Canada has to be the dividend tax credit in a non – registered account (puting aside the witholding tx thing from USA investments in TFSA (altho British stocks and maybe other countries so not have such)and no other reason; So the question Kyle is R u touting a Canadian Dividend etf for non-registred equity or do u believe as i do for now that there is no way that such an etf can give one the same tax enhancement that the higher dividend blue chip individual stocks can and one should continue with this method almost exclusively in non-registered? (also in long run the Gross up methodolgy of dividend stock of 20% can bring claw back in government OAS payments if one lives long enuf and grows an account high enough – any comment here and should one even concern about oas clawbacks if making great dividend income from non-reg rather than going through manipulations to keep it down below the approx $70,000 per year)? thks for your opinions

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