Recommended ETFs

The ETF marketplace has exploded in recent years. There are currently seven firms offering over 300 exchange-traded products in Canada. Canadians can also invest in ETFs listed on US exchanges, which increases the number of choices to well over 1,500.

While choosing the right products is important, it should not be the primary concern of Couch Potato investors. Investing success depends far more on a commitment to saving and disciplined behaviour. If you are overwhelmed by the choices, consider these recommended ETFs, many of which are found in my model portfolios. ETFs that trade on US exchanges are marked with a dagger (†).

The list is not comprehensive: experienced investors may make different choices, especially if they want to follow non-traditional  strategies or have specific tax considerations.

All MERs are current as of January 2014: in the case of funds less than one year old, the MERs are estimated based on the management fee plus 13% HST and will be updated as soon as they are published.

Canadian equity

ETF name Ticker MER Description
Vanguard FTSE Canada All Cap VCN 0.14 Canada’s largest 250+ stocks
iShares S&P/TSX 60 XIU 0.18 Canada’s largest 60 stocks
Horizons S&P/TSX 60 HXT 0.06 Tax-friendly swap structure

Canadian bonds

Vanguard Canadian Aggregate Bond VAB 0.22 Excellent core bond holding
Vanguard Canadian Short-Term Bond VSB 0.19 Short-term bonds only
iShares DEX Real Return Bond XRB 0.39 Inflation-protected bonds

Canadian real estate

BMO Equal Weight REITs ZRE 0.62 Uses equal-weight strategy
Vanguard FTSE Cdn Capped REIT VRE 0.40 Uses cap-weighted strategy

US equity

Vanguard Total Stock Market VTI 0.05 Over 3,400 US stocks
Vanguard US Total Market VUN 0.17 Canadian version of VTI

International equity

Vanguard MSCI EAFE VEA 0.12 Europe, Australasia, Far East
iShares MSCI EAFE IMI XEF 0.34 Over 2,500 EAFE stocks

Emerging markets equity

Vanguard FTSE Emerging Markets VWO 0.18 20+ emerging countries
iShares MSCI Emerging Markets IMI XEC 0.39 Over 1,600 emerging stocks

Global equity

Vanguard Total Int’l Stock Market VXUS 0.16 All countries except US
iShares MSCI World XWD 0.47 US, EAFE countries and Canada