Which Are The Best ETFs To Buy In Canada in 2022?

While ETFs don’t show the glamorous growth that investment options such as undervalued IT, pharma and CBD stocks show, they are definitely a lot safer for your long term investment needs. They can also help you diversify your portfolio without spending an exorbitant amount of money in building your portfolio from scratch. In this post, we will take a quick look at ETFs and find out which are the best ones for Canadian investors to buy. Let’s get started.

Best ETFs in Canada: Which Are Your Best Options?

What is an ETF?

An “Exchange Traded Fund”. It is a kind of security that tracks an index, sector, commodity, or other assets. An ETF can also be traded on the stock exchange like a normal stock. ETFs can be structured to track just about everything. They are used to track the prices of individual commodities as well as a menagerie of securities. ETFs also help investors track certain investment strategies. Now that we have got a basic idea of ETFs,

Here are the best ETFs in Canada:

Vanguard S&P 500 Index ETF (VFV)

According to legendary American investor and billionaire Warren Buffet, investing in the S&P 500 is the best investment an average investor can make in their career. The Vanguard S&P 500 Index ETF is an ETF that aims to track the performance of the S&P 500 Index. How? In fact, investing in the Vanguard S&P 500 Index ETF is like investing in the 500 (quite a bit more in fact) of the largest publicly traded US companies. So instead of buying Apple, Facebook, Tesla, etc. one by one (which will cost you thousands of your hard earned dollars) you can invest in all of its companies for less by buying VFV stocks.

Historically, the S&P 500 index is up +/- 7% per year.

Vanguard FTSE Canada All Cap Index ETF (VCN)

The Vanguard FTSE Canada All Cap Index ETF was created by the financial conglomerate Vanguard to replicate the performance of the Canadian equity performance index. Therefore, this ETF replicates the performance of large, mid and small cap companies traded on the Canadian stock market. This index is called the FTSE Canada All Cap Domestic Index.

Horizons S & P / TSX 60 INDEX ETF (HXT)

The title Horizons S & P / TSX 60 Index ETF is an ETF that replicates the performance of the S & P / TSX 60.

Historically, the S & P / TSX 60 index has increased +/- 7% per year.

Like the S&P 500 Index, the S & P / TSX 60 Index is managed by the American company Standard & Poor’s. This index includes the 60 largest companies listed on the Toronto Stock Exchange (TSX).

iShares Core S&P US Total Market Index ETF (XUU)

IShares Core S&P US Total Market Index ETF aims to replicate the performance of the entire US stock market.

The US stock market has an estimated annual return of around 9.3%. So, $ 10,000 invested 10 years ago in this security would be worth about $ 24,000 thanks to the magic of compound interest. Investing in the US stock market has a lot of benefits such as:

  • You diversify your portfolio across all US industries.
  • If the US economy continues to grow and dominate internationally, your assets will move in the same direction.

BMO Low Volatility Canadian Equity ETF (ZLB)

The BMO Low Volatility Canadian Equity ETF is a Canadian ETF powered by Bank of Montreal that aims to expose its investors’ portfolio to a range of low volatility Canadian assets.

This is an excellent option for investors who want a stable and secure return on their investment.

This ETF invests primarily in financial services and communications. When you invest in this ETF, you get the following benefits:

  • You bet on the performance of Canadian stocks on the stock market.
  • The management fees are very low, the ETF is passively managed by Vanguard.
  • The risk associated with this ETF is low.

How to buy ETFs in Canada?

One of the simplest methods to buy ETFs in Canada is through web and mobile applications. These easy to use apps are great for investors of varying skill level and experience to invest in the stock market and buy ETFs. 

So now you know what ETFs are, why you should buy them, which are the best ETFs in Canada and how you can buy them. So what are you waiting for, get started with some ETF investing.

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