Recommended Index Funds
TweetWhile ETFs get far more attention, index mutual funds are still an excellent choice for Couch Potato investors, especially those who want to keep things simple, those who contribute small amounts every month, and those with accounts less than $50,000.
Unfortunately, most index funds in Canada are far too expensive, and indexing does not work when the costs are too high. Below is list of the best products available, with a description of when they are most appropriate. To see how these fit into the larger picture, visit the Model Portfolios page.
Mutual funds that hedge their exposure to foreign currency are marked with an asterisk (*).
TD Mutual Funds
TD’s e-Series index funds are the best choice for most Couch Potato investors. However, they are only available to investors who open an online account with TD Canada Trust, or through a TD Waterhouse discount brokerage account. If you plan to invest with index mutual funds, this is definitely worth the effort.
| Fund name |
Fund ID | MER | Index tracked |
| TD Canadian Index – e | TDB900 | 0.33 | S&P/TSX Composite |
| TD US Index – e | TDB902 | 0.35 | S&P 500 |
| TD US Index – e * | TDB904 | 0.51 | S&P 500 |
| TD International Index – e | TDB911 | 0.50 | MSCI EAFE |
| TD International Index – e * | TDB905 | 0.53 | MSCI EAFE |
| TD Canadian Bond Index – e | TDB909 | 0.51 | DEX Universe Bond |
The TD index funds are also available in a higher-fee “Investor Series,” which can be purchased through any discount brokerage. In most cases, the RBC and Altamira funds listed below are less expensive, but a some of these may be useful.
| Fund name | Fund ID | MER | Index tracked | |
| TD Canadian Index | TDB216 | 0.88 | S&P/TSX Composite | |
| TD US Index | TDB661 | 0.54 | S&P 500 | |
| TD Canadian Bond Index | TDB966 | 0.83 | DEX Universe Bond | |
| TD Balanced Index | TDB965 | 0.89 | [blended] | |
RBC Asset Management
For investors who do not have access to the TD e-Series funds, RBC’s family of funds is the next best bet. They are available through all discount brokerages. Note that RBC’s bond index fund includes government bonds only. For a more broadly diversified fund that includes corporate bonds as well, consider TDB966.
| Fund name | Fund ID | MER | Index tracked |
| RBC Canadian Index | RBF556 | 0.72 | S&P/TSX Composite |
| RBC US Index | RBF557 | 0.72 | S&P 500 |
| RBC US Index * | RBF558 | 0.72 | S&P 500 |
| RBC International Index * | RBF559 | 0.70 | MSCI EAFE |
| RBC Canadian Gov’t Bond Index | RBF563 | 0.66 | DEX Universe Federal Bond |
Altamira (National Bank of Canada)
Altamira’s family of index funds is also a good choice for equities. They do not offer a bond fund, however: consider using TDB966.
| Fund name | Fund ID | MER | Index tracked |
| Altamira Canadian Index | NBC814 | 0.66 | S&P/TSX 60 |
| Altamira US Index | NBC846 | 0.63 | Dow Jones Industrial Avg |
| Altamira US Index * | NBC856 | 0.64 | S&P 500 |
| Altamira International Index | NBC839 | 0.65 | MSCI EAFE |
| Altamira International Index * | NBC877 | 0.67 | MSCI EAFE |
ING Mutual Funds
The Streetwise Funds are only available directly from ING. Although the fees are relatively high for index funds, there are no account minimums, and investors do not need to work with a discount brokerage, pay annual account fees, or rebalance their portfolios. That makes these funds an excellent choice for novice investors with small portfolios.
| Fund name | MER |
| Streetwise Balanced Fund | 1.07 |
| Streetwise Balanced Income Fund | 1.07 |
| Streetwise Balanced Growth Fund | 1.07 |
| Streetwise Equity Growth Fund | 1.07 |
Dimensional Fund Advisors
Strictly speaking, Dimensional funds are not “index funds,” as they do not track any index. They are more properly called “asset class funds,” as they’re designed to capture the returns of specific equity or fixed income markets by holding hundreds or thousands of securities. Built on the Fama-French Three Factor Model, the equity funds give additional weight to small-cap and value stocks.
The funds are not available to DIY investors: they can be accessed only through a select group of financial advisors. The Class F versions are listed below; the Class A funds have higher fees that also include the cost of advice.
| Fund name | Fund ID | MER | |
| Canadian Core Equity | DFA256 | 0.39 | |
| Canadian Vector Equity | DFA600 | 0.45 | |
| US Core Equity | DFA293 | 0.44 | |
| US Vector Equity | DFA223 | 0.50 | |
| International Core Equity | DFA295 | 0.60 | |
| International Vector Equity | DFA227 | 0.71 | |
| Global Real Estate Securities | DFA391 | 0.63 | |
| 5-Year Global Fixed Income | DFA231 | 0.40 | |
| Investment Grade Fixed Income | DFA449 | 0.42 | |
