Finding the right ETFs in Canada can significantly impact your investment portfolio. This comprehensive guide explores the top-performing Canadian ETFs for February 2025, helping you make informed investment decisions. Before diving in, consider reading our guide on what is an ETF and how it works.
What Makes a Good ETF Investment?
Quality ETFs typically feature low management fees, good liquidity, and solid track records. Many investors use them alongside dividend stocks for a well-rounded portfolio. Consider using investment apps to start your ETF investing journey.
Best ETFs in Canada This Month (February 2025)
Top Canadian Equity ETFs
1. iShares S&P/TSX 60 ETF (XIU)
- Management Fee: 0.15%
- Dividend Yield: 3%
- Fund Size: $12.8 billion
XIU remains Canada's largest and most liquid ETF, offering exposure to 60 leading Canadian companies. Its low fee structure and high trading volume make it ideal for both new and experienced investors.
2. Horizons S&P/TSX 60 ETF (HXT)
- Management Fee: 0.04% (after rebate)
- Tax Efficiency: High
- Fund Size: $3.6 billion
HXT stands out for its innovative tax-efficient structure and extremely low fees, making it perfect for non-registered accounts. The swap-based structure minimizes taxable distributions.
3. Vanguard FTSE Canada All Cap Index ETF (VCN)
- Management Fee: 0.05%
- Market Coverage: Broad
- Holdings: 190+ stocks
VCN offers comprehensive exposure to Canadian companies across all market capitalizations, providing excellent diversification at a low cost.
4. BMO S&P/TSX Capped Composite Index ETF (ZCN)
- Management Fee: 0.06%
- Dividend Yield: 2.8%
- Holdings: 200+ stocks
ZCN tracks over 200 of Canada's largest companies with high liquidity and solid dividend yield, offering broad market exposure.
Sector-Specific ETFs
5. iShares S&P/TSX Capped Information Technology Index ETF (XIT)
- Management Fee: 0.61%
- Performance: 600%+ since inception
- Sector Focus: Technology
XIT focuses exclusively on Canadian technology companies, delivering exceptional returns for investors seeking tech sector exposure.
6. iShares S&P/TSX Capped Materials Index ETF (XMA)
- Management Fee: 0.55%
- January 2025 Return: 10.12%
- Sector Focus: Materials & Resources
XMA provides concentrated exposure to Canada's materials sector, benefiting from commodity price movements and resource demand.
Dividend and Income ETFs
7. FTSE Canadian High Dividend Yield Index ETF (VDY)
- Management Fee: 0.20%
- Dividend Focus: High-yield
- Distribution Frequency: Monthly
VDY targets Canadian companies with above-average dividend yields, ideal for income-focused investors seeking regular distributions.
8. Vanguard Retirement Income ETF Portfolio (VRIF)
- Management Fee: 0.29%
- Target Distribution: 4% annually
- Portfolio Type: Multi-asset
VRIF is designed specifically for retirees, offering a consistent monthly income stream with a focus on capital preservation.
International and U.S. Exposure ETFs
9. Vanguard FTSE Global All Cap ex Canada Index ETF (VXC)
- Management Fee: 0.20%
- Geographic Coverage: Global ex-Canada
- Holdings: 9,000+ stocks
VXC offers comprehensive global diversification outside of Canada, providing exposure to developed and emerging markets worldwide.
10. Horizons S&P 500 Index ETF (HXS)
- Management Fee: 0.10%
- Tax Efficiency: High
- Market Focus: U.S. Large-Cap
HXS provides tax-efficient exposure to the S&P 500, making it an excellent choice for Canadian investors seeking U.S. market exposure.
Summary of Best Canadian ETFs (February 2025)
| ETF Name | Ticker | Management Fee | Key Feature |
|---|---|---|---|
| iShares S&P/TSX 60 | XIU | 0.15% | High Liquidity |
| Horizons S&P/TSX 60 | HXT | 0.04% | Tax Efficiency |
| Vanguard FTSE Canada All Cap | VCN | 0.05% | Broad Market |
| BMO S&P/TSX Composite | ZCN | 0.06% | High Dividends |
| iShares Tech Index | XIT | 0.61% | Tech Focus |
| iShares Materials Index | XMA | 0.55% | Resource Exposure |
| Vanguard High Dividend | VDY | 0.20% | Income Focus |
| Vanguard Retirement Income | VRIF | 0.29% | Monthly Income |
| Vanguard Global ex-Canada | VXC | 0.20% | Global Diversity |
| Horizons S&P 500 | HXS | 0.10% | U.S. Exposure |
Final Words
Canadian ETFs offer diverse investment opportunities for February 2025, with options spanning various sectors and strategies. Whether you're seeking broad market exposure, sector-specific investments, or income generation, there's an ETF suited to your investment goals. Remember to consider factors such as management fees, liquidity, and tax efficiency when making your selection.
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Frequently Asked Questions About Canadian ETFs
What are the average management fees for Canadian ETFs?
Canadian ETF management fees typically range from 0.04% to 0.50% for broad market ETFs. Specialty or actively managed ETFs may charge higher fees, usually between 0.60% and 1.00%.
Are Canadian ETFs good for beginners?
Yes, Canadian ETFs are excellent for beginners due to their low minimum investment requirements, broad diversification, and simple trading process. They offer an easy way to invest in multiple companies or sectors through a single investment.
How often do Canadian ETFs pay dividends?
Most Canadian ETFs pay dividends quarterly, though some may pay monthly or annually. The frequency depends on the ETF's structure and investment strategy. Dividend-focused ETFs often offer monthly distributions.
What's the minimum amount needed to invest in Canadian ETFs?
The minimum investment for Canadian ETFs is typically the price of one share, which can range from $20 to $100. Some brokerages now offer fractional shares, allowing you to start with as little as $1.
