The Best ETFs for Beginners in Canada

You've opened a TFSA. You've funded your account. Now what do you actually buy? If you're a beginner, the answer is simpler than you think: one all-in-one ETF.

What is an all-in-one ETF?

An all-in-one ETF holds thousands of stocks (and sometimes bonds) from around the world in a single fund. When you buy one share of XEQT, for example, you're buying a slice of over 9,000 companies across Canada, the US, Europe, Asia, and emerging markets. Instant diversification.

The top picks

XEQT (iShares, 0.20% MER) and VEQT (Vanguard, 0.24% MER) are the two most popular choices for long-term growth. Both hold 100% stocks with global diversification. The difference between them is negligible — pick either one and stick with it.

If you want some bonds for stability, XGRO/VGRO (80% stocks, 20% bonds) or XBAL/VBAL (60/40) are great options. The more bonds, the less volatility — but also lower expected long-term returns.

How to choose your risk level

Your timeline is the key factor. If you're 20+ years from needing the money, go 100% stocks (XEQT/VEQT). If it's 10-20 years, 80/20 is reasonable. Under 10 years, consider a balanced or conservative mix. Under 5 years, stick to GICs and HISAs.

The buy-and-hold strategy

Buy your chosen ETF every month (or every paycheque). Don't check the price. Don't try to time the market. Set up auto-invest if your platform supports it. This is called dollar-cost averaging, and it's the strategy used by the most successful long-term investors. The boring approach wins.