Canada launched the first-ever exchange-traded fund (ETF) in March 1990 as a substitute for mutual funds. Since then, demand for the asset class has considerably grown. At this time, traders purchase and promote ETFs like particular person shares on the TSX and different international inventory markets.
Instantaneous diversification is a outstanding function of ETFs. Investing in a “basket of property” eliminates the cumbersome job of inventory choice and mitigates dangers. A balanced technique in 2026 is to prioritize ETFs that cowl almost all main sectors, particularly the dependable segments of the TSX. The highest three Canadian ETFs additionally present month-to-month distributions at engaging yields.
Supply: Getty Photos
Publicity to the “Huge 6”
BMO World Asset Administration is the fund supervisor of the BMO Equal Weight Banks Index ETF (TSX:ZEB). Canada’s Huge Six banks, individually, are rock-solid investments for his or her monetary stability and wholesome long-term returns. ZEB gives publicity to all these big lenders in a single basket. The ETF replicates the efficiency of the Solactive Equal Weight Canada Banks Index.
Banking is a high-quality sector in Canada, which is taken into account a bedrock of stability globally. The load allocation per financial institution is equal, not based mostly on market capitalization, to minimize particular dangers. An underperformance by a financial institution inventory is not going to unduly affect all the fund.
So far in 2026, ZEB is up 15.6% year-to-date. Should you make investments right now, the unit or share worth is $66.77. The present dividend yield is 2.6%.
Basket of dividend developth shares
The iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (TSX:CDZ) of BlackRock gives extra diversified publicity. The fund invests in established Canadian dividend payers, particularly shares with dividend progress streaks of not less than 5 years.
The publicity is heaviest on the vitality and monetary sectors. Solely healthcare isn’t represented among the many TSX’s 11 main sectors. SouthBow Company, TELUS, and Westshore Terminals are the highest three holdings. CDZ’s inception date is September 2006
As of Could 14, 2026, the variety of holdings is 96. At $44.79 per share, present traders get pleasure from an 11% year-to-date achieve on high of the three.1% dividend.
Equal-weight benefit
BMO World Asset Administration additionally manages the BMO Equal Weight REITs Index ETF (TSX:ZRE). The fund replicates the Solactive Equal Weight Canada REIT Index and seeks to offer long-term capital progress. The publicity is to varied actual property funding trusts (REITs). These institutional landlords personal and function residential, multi-family residential, industrial, retail, and workplace properties.
Like with ZEB, this ETF is equal-weighted. The aim is to unfold threat evenly, with no heavy focus in any specific actual property sector or large-cap REITs. ZRE trades at $23.22 per unit (+7% year-to-date) and pays a hefty 4.2% dividend. RBC Capital Markets forecast a excessive single-digit return for Canada’s REIT business in 2026.
Tailor-made to fashionable traders
ETFs are tailor-made to fashionable traders, particularly for these in search of on the spot diversification. The highest Canadian ETFs with particular themes present stability and constant passive month-to-month revenue. Moreover, regardless of their medium to high-risk scores, all three proceed to show resilience amid a unstable market in 2026.
