Best Index Funds in Canada for 2026

The Short Answer

Buy one all-in-one ETF, set up automatic​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ contributions, and stop shopping. XEQT is our pick.

An index fund tracks a market instead​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ of trying to beat it. You do not pay a manager to pick winners. You own a slice of hundreds or thousands of companies and accept the market’s return, minus a small fee. If you want the full background, start with our guide to what an index fund is in Canada at /what-is-an-index-fund-canada/. This page skips the basics and goes straight to the comparison.

Canada has a good problem: dozens of​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ cheap, solid index options. The challenge is not finding a good one. The challenge is not overthinking the choice. The difference in fees between the top options is a few hundredths of a percent. The difference between investing consistently and dithering for two years is enormous.

So here is how we handle this page.​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ We compare a short list: TD e-Series, XEQT, VEQT, and a few broad market ETFs. We show fees, holdings, and geography side by side. Then we give you a verdict, and we stand behind it.

Best Index Funds in Canada, Compared

Here is the side by side. Fees and holdings​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ come from issuer fact sheets and move slightly over time.

Look at the last column. Only the all-in-one​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ ETFs rebalance themselves. Everything else in the table requires you to decide the mix, buy each piece, and fix the drift when one region outruns the others.

TD e-Series Index Funds

TD e-Series funds are the classic bank-run​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ index option. They work, but they carry more friction than people expect.

TD e-Series index funds are mutual funds,​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ not ETFs. You buy them through TD Direct Investing, usually in a TFSA or RRSP, with no commission. They track broad indexes: a Canadian fund, a US fund, and an international fund. Many investors search for TD e-Series index funds because they feel familiar and come from a big bank.

The upside is real. You can buy in exact​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ dollar amounts, so a $250 monthly contribution invests fully with no leftover cash. You also avoid ETF bid-ask spreads. For someone who already banks and invests at TD and wants no learning curve, that matters.

The downsides add up. MERs run higher​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ than the cheapest ETFs, roughly 0.33% to 0.50% depending on the fund, versus 0.20% for XEQT. You need at least three funds to cover the world, so you must pick the weights yourself. Nothing rebalances them for you. And you generally need a TD account, which limits your platform choices.

Run the math on a $100,000 portfolio.​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ A fee gap of 0.20 percentage points costs about $200 a year. Over 25 years of growth, that gap compounds into a five figure difference. Plain and simple: you pay more and you work more.

XEQT vs VEQT

These two are near twins. Pick one, hold it, and move on.

XEQT (iShares) and VEQT (Vanguard) both​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ give you 100% stocks across Canada, the US, international developed markets, and emerging markets, in a single ticker. Both rebalance automatically. Both come from giant, reputable issuers. Both work in a TFSA, RRSP, or non-registered account.

The differences are small. XEQT charges​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ a lower MER, 0.20% versus 0.24%. VEQT holds more Canada, roughly 30% versus about 25% for XEQT, and XEQT holds a bit more in the US and international markets. VEQT also uses more underlying funds, so its look-through holdings count is higher. In practice, both own most of the investable world.

Does the 0.04% fee gap matter? On $100,000​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ it is $40 a year. It compounds, but it will not change your life. What changes your life is contribution size and time in the market. We pick XEQT because it costs less and sits at the center of everything on this site, but if you already own VEQT, do not sell it just to switch. Selling can trigger capital gains in a taxable account, and the gain from switching rounds to zero.

Broad Market ETFs: XIC, VFV, and Friends

Single market ETFs are great building​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ blocks. They are not a finished portfolio.

XIC covers about 230 Canadian companies​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ for a 0.06% MER. VFV tracks the S&P 500, about 500 large US companies, for roughly 0.09%. XAW gives you the world outside Canada for around 0.22%. VUN is a similar US total market option. Each one does its job well and costs very little.

Here is the catch. Each fund covers​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ one slice. If you hold only XIC, you own Canada’s banks, energy companies, and miners, and almost none of the global tech and healthcare giants. If you hold only VFV, you bet everything on one country. Both bets can work for years, then fail for years. Canada lagged the US for much of the last decade. Leadership rotates, and no one rings a bell.

You can fix this by combining them.​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ A popular DIY mix is something like 30% XIC, 40% VFV, and 30% XAW. That produces a global portfolio with a blended fee under 0.15%. It looks great on paper. The savings versus XEQT are roughly 0.05 to 0.10 percentage points, or $50 to $100 a year on $100,000.

Now count the cost of the DIY version.​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ You make three trades every time you contribute. You decide when to rebalance. You resist the urge to tilt toward whatever just won. You track more cost base records in a taxable account. Many investors will not do that consistently. One missed rebalance or one panicked tilt can wipe out years of fee savings.

Why One Fund Beats a Multi-Fund Portfolio

Here is our opinion, stated plainly:​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ for most people, one all-in-one ETF beats a portfolio you assemble yourself.

The multi-fund approach sounds smarter.​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ More control, a few basis points saved, a spreadsheet to feel clever with. But investing rewards behavior, not cleverness. The best portfolio is the one you keep buying through a crash.

We should acknowledge the nuance. A​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ multi-fund portfolio makes sense in a few cases. You may want to hold bonds in a specific ratio, so you pair an equity fund with a bond fund. You may want asset location control, such as US stocks in an RRSP to dodge withholding tax. You may be a large investor who values every basis point and enjoys the process. Those are legitimate reasons.

For everyone else, the simple path wins.​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ If you want a deeper look at the other criticism, read our rebuttal at /motley-fool-xeqt-rebuttal/. If you worry about 100% stocks at your life stage, our guide at /life-stage/ walks through it decade by decade.

How to Buy Your Pick

Choosing the fund takes ten minutes. Setting it up takes one afternoon.

If you already hold TD e-Series funds,​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ you do not need to panic. Compare the fees, check for any tax impact in a non-registered account, and switch only if the math makes sense. In a TFSA or RRSP, switching costs you nothing in tax. For a deeper look at where to hold your fund, read /xeqt-inside-rrsp-or-tfsa/.

One last reminder on data. Fees, holdings​‌‌​‌​‌​​‌‌​​​‌​​‌‌‌‌​​​​‌‌​​‌​‌​‌‌‌​​​‌​‌‌‌​‌​​‍​​​​​​​​‌​​​‌‌​​​‌‌​‍‌‌​‌​‌​‌‌‌​​‌‌​​‌​‌‌‌​‌‌‌​‌‌‌‌​ counts, and country weights change. The numbers in this article come from fund fact sheets as of January 2026 and are rounded. Check the current iShares and Vanguard pages before you place a trade. This is general education, not personalized financial advice.