Canadian ETF All-Stars 2017

Our picks of the best, low-cost Canadian-focused ETFs for your portfolio

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Home country bias or no, Canadian equities remain the core asset class for domestic investors, in both registered plans and taxable ones. Our expert panel saw no reason to tinker with its three solid picks from last year.

coins_v3The Vanguard FTSE Canada All Cap Index ETF (VCN) and iShares’ Core S&P/TSX Capped Composite Index ETF (XIC) each provide broad market exposure to 221 and 250 domestic stocks, respectively, and both sport a rock-bottom management fee of 0.05% or five basis points (MERs, which include the management fee and trading costs, are 0.06%). VCN was launched in August of 2013 so now has three-year performance data. XIC was launched in 2001 and has 10-year data.

For taxable plans, the Horizons S&P/TSX 60 ETF (HXT) continues to give non-registered investors favourable tax treatment, by effectively commuting dividends into capital gains that won’t be realized until the units are sold some time in the (hopefully) far future. The fund was launched in 2010 and remains one of the lowest-cost funds in the market: a fee rebate that took HXT’s management fee down from 0.07% to 0.03% is being extended at least until Sept. 30, 2017. Forstrong Global Asset Management’s  Tyler Mordy sees HXT as the single best pick for Canadian large-cap stocks.

Canadian ETF All-Stars 2017


ETF Ticker Management Fee # of Holdings Description
Vanguard FTSE Canada All Cap Index ETF VCN 0.05% 221 Exposure to Canadian small, medium and large caps, ultra low fee
iShares Core S&P/TSX Capped Composite Index ETF XIC 0.05% 250 Tracks Canada's best known index with a very low fee
Horizons S&P/TSX 60 ETF HXT 0.03% 60 Tax-efficient; rock-bottom 0.03% fee to extend at least till September 2017

10 comments on “Canadian ETF All-Stars 2017

  1. I wish you had included previous performance for each ETF.

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  2. What excluded ZCN from this list?

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    • VCN ( MER=0.05%) is slight.y cheaper to own than ZCN (MER=0.06%), and both offer IDENTICAL PERFORMANCE, making ZCN the obvious choice, by a very small margin.

      Reply

  3. BMO’s ZCN is identical to XIC, but was not included in this list. Why?

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    • VCN ( MER=0.05%) is slight.y cheaper to own than ZCN (MER=0.06%), and both offer IDENTICAL PERFORMANCE, making ZCN the obvious choice, by a very small margin.

      Reply

  4. I’d be interested in an ETF if it was “green” – no fossil fuels. Are there any like that?

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    • Hi Eve,

      Yes there are certainly ETFs that fit the “green” description. For that matter there are ETFs that suit most strategies these days. There are ETFs that focus on gender diversity (SPDR SSGA Gender Diversity Index), clean energy (PowerShares WilderHill Clean Energy ETF) and even ETFs that focus on water (PowerShares Global Water Portfolio). There are fewer choices in Canada, but one ETF that might satisfy your “green” requirement is the iShares Jantzi Social Index ETF (TSX: XEN), which selects companies that “reflect a higher standard of environmental, social and governance performance.” But I’d encourage you to read up on the fund to know whether it meets your definition of green.
      – Mark

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  5. Before opening the comments section, I had the same question as Mr disco and Gail. Why is BMO’s ZCN hardly mentioned?

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  6. These ETFs have LOW MERs compardd to BMO’s low Beta ZLB, but that also have POW PERFORMANCE compared to ZLB, which posted a 3 year return of 35% compared to only 10% for VCN. Perhaps you get what you pay for?

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  7. Have $120,000 to invest, sold some property not an investor at all . read 40% VAB 20%VCN 20% VUN 20%VDU. Can I buy these or just buy a Tangerine Investment fund that lower maintenance but higher fee?

    Reply

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