8 Top-Performing Canadian Equity ETFs

Exchange-traded funds focusing on Canadian stocks are the core of most investor portfolios. To find the best options, we screened the Canadian stock ETFs covered by Morningstar analysts for those they believe stand the best chance of outperforming.

To screen for the top-performing ETFs in this category, we looked for those with the best returns over the last one-, three-, and five-year periods. Among the ranks, offerings from BlackRock stood out, taking up three of the eight spots.

1. BMO S&P/TSX Capped Composite Index ETF ZCN
2. CI RAFI Canadian Index ETF PXC
3. Franklin FTSE Canada All Cap Index ETF FLCD
4. iShares Canadian Fundamental ETF CRQ
5. iShares Core S&P/TSX Capped Composite Index ETF XIC
6. iShares S&P/TSX 60 Index ETF XIU
7. Vanguard FTSE Canada All Cap Index ETF VCN
8. Vanguard FTSE Canada Index ETF VCE

Canadian Equity Fund Performance

Over the past 12 months, the average fund in the Canadian equity Morningstar Category returned 18.70%. On an annualized basis, Canadian equity funds have climbed 19.39% over the past three years and gained 12.50% over the past five years. Meanwhile, the Morningstar Canada Index has risen 24.41% over the past 12 months, gained 24.05% per year over the past three years, and gained 15.35% per year over the past five.

What Are Canadian Equity ETFs?

Funds in the Canadian equity category must invest at least 90% of their equity holdings in securities domiciled in Canada, and their average market capitalization must be greater than the Canadian small/mid-cap threshold, according to the Canadian Investment Funds Standards Committee.

Screening for the Top-Performing Canadian Equity ETFs

To find the best Canadian equity ETFs, we looked at return data from the past one, three, and five years, using data available in Morningstar Direct. We screened for Canada-domiciled exchange-traded funds in the top 33% of the category using their lowest-cost primary share classes for those periods. We also filtered for ETFs with a Morningstar Medalist Rating of Bronze, Silver, or Gold. We excluded ETFs with assets under C$100 million and analyst coverage that was not 100%. This left eight investments.

BMO S&P/TSX Capped Composite Index ETF

• Ticker: ZCN
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★

The C$18.1 billion fund has gained 23.78% over the past year, while the average fund in its category is up 18.70%. The BMO fund, which launched in May 2009, has climbed 23.08% over the past three years and gained 14.68% over the past five years.

BMO S&P/TSX Capped Composite ETF offers broad exposure to the Canadian stock market at a low price, a simple formula that few of its peers have been able to beat in the long run.

Tracking nearly the entire Canadian stock market makes this a well-diversified portfolio. It normally tallies around 230 holdings, the top 10 of which represented between 35% and 39% of the portfolio over the past 10 years. That’s a higher share than the Canadian equity Morningstar Category average, but is on par with its Morningstar Canada Index category benchmark. Sweeping in mid- and small-cap stocks can present an edge when large caps fall out of favor.

This strategy weights stocks by market capitalization, a cost-efficient and proven approach. Market-cap weighting channels the market’s collective view on the relative value of each holding, allowing the fund to coast on the opinions of the crowd without incurring a lot of expenses. It also requires little turnover, a benefit that’s enhanced further by index buffers that are designed to cut back on trading and the costs that come with it.

The shape of this index fund looks a lot like the average portfolio in its category. Its average holding is a bit larger than the category average, but the portfolios sport nearly identical sector compositions and value-growth orientations. Mirroring the category norm indicates that this fund captures the full opportunity set available to its active peers. It also means that the fund maximizes the impact of its cost advantage, a reliable engine for sound category-relative performance.

Sector-level concentration creeps into this portfolio. Heavy stakes in financials (34% of assets as of June 2026) and energy (18%) tend to soak up about half the portfolio. These biases reflect the composition of the Canadian market rather than a flaw in its target index. Still, the fund can suffer when those sectors, or certain industries within them, face challenges.

The fund outperformed its average peer by 1.90 percentage points annualized over the past 10 years through June 2026. The fund’s return fluctuated more than its average peer during that period, but its risk-adjusted performance was still higher. Low fees, low turnover, and little cash allow the fund to capture the Canadian stock market’s performance with minimal drag.

CI RAFI Canadian Index ETF

• Ticker: PXC
• Morningstar Medalist Rating
  : Bronze
• Morningstar Rating
  : ★★★★★

The C$262.8 million fund has gained 33.46% over the past year, while the average fund in its category is up 18.70%. The CI Global Asset Management fund, which launched in January 2012, has climbed 26.22% over the past three years and gained 18.63% over the past five years.

Invesco RAFI Canadian ETF started tracking a new index in March 2025, but it still follows a rules-based approach that concentrates on companies with strong fundamentals. The index adds some adjustments to limit the extreme sector biases of its predecessor, but they’re not fully remedied.

The exchange-traded fund tracks the RAFI Fundamental Select Canada 100 Index, which takes the top 100 Canadian companies by fundamental weight from the RAFI Global Equity Investable Universe. Four financial metrics inform the score: dividends plus buybacks, adjusted cash flow, adjusted sales, and book equity plus intangibles, with more weight given to stocks with higher scores. Stocks must also meet certain liquidity requirements to ensure they can trade efficiently.

The rationale behind fundamental weighting is reasonable, but the approach carries risks. In theory, breaking the link between stock weights and market capitalization tunes out market noise and provides a more accurate reflection of a company’s size and value. However, there is no consensus way to calculate intrinsic value, and every method lacks precision. Plus, there are many nonfinancial factors that affect a stock’s price.

The portfolio uses broad metrics to determine the value of a stock, but the process has limitations. It doesn’t account for sales or earnings growth, and it lacks sector constraints. It adjusts metrics to mitigate some of the previous index’s biases. For instance, the index multiplies each stock’s revenue by its equity/assets ratio, which rewards companies generating revenue with less debt. That limits the fund’s appetite for bank stocks, which tend to generate smaller revenue as a percentage of their capital. However, the portfolio still holds heavier allocations to financial and energy stocks compared with its typical Canadian equity Morningstar Category peer.

The fund is more concentrated than its average peer. It holds less than one-third as many stocks and stows a hefty 44% of assets in its top 10 holdings, compared with 31% for the category norm, as of June 2026. It also favors larger companies, allocating more than market-cap-weighted competitors to giants with strong fundamentals, such as Royal Bank of Canada.

Past performance has been strong compared with peers. It outperformed its average Canadian equity peer by 1.97 percentage points annualized from its January 2012 inception through June 2026. Risk-adjusted returns higher than its average peer, despite higher volatility. Cyclical performance trends of financial and energy stocks should largely drive future fund returns.

Franklin FTSE Canada All Cap Index ETF

• Ticker: FLCD
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★

The C$238.9 million fund has climbed 23.09% over the past year, outperforming the average fund in its category, which rose 18.70%. The Franklin Templeton fund, which launched in February 2019, has climbed 23.04% over the past three years and gained 14.82% over the past five years.

The FTSE Canada All Cap Domestic Index underpins this fund. The benchmark absorbs the stocks that represent the top 98% of the Canadian stock market’s capitalization after removing those that fail to meet basic liquidity and size requirements. It weights its holdings by market cap and reconstitutes each March and September. Liquidity and size buffers make it easier for current constituents to stick in the portfolio, a measure that dials back turnover and the requisite transaction costs.

This strategy weights stocks by market capitalization, a cost-efficient and proven approach. Its market-cap weighting channels the market’s collective view on each holding’s relative value, allowing the fund to coast on the research of the crowd without running up its own expenses. It also requires little turnover, a benefit that’s complemented by index buffers designed to limit turnover and the accompanying trading costs.

This fund mirrors the shape of the Canadian stock market and its average peer in the Canada equity category. The fund’s market-cap weighting gives it a slightly larger market-cap orientation than the category average, but the portfolios trade at nearly identical valuations. Their sector allocation is right in line, too. That entails a heavy dose of financials (34% of assets as of August 2025) and energy stocks (16%). Routinely stashing over half its portfolio in those sectors presents some concentration risk, but it reflects the state of the market and does not distinguish the fund from its category peers.

Canada’s largest companies headline this portfolio. Royal Bank of Canada, Shopify, and Toronto-Dominion Bank held down the top three spots as of August 2024. Market-cap weighting can precipitate concentration—the top 10 holdings normally represent 35% to 41% of assets—but the market’s largest companies normally earn their valuations for good reasons. Nine of the top 10 holdings sported wide or narrow Morningstar Economic Moat Ratings, which reflect their financial health and competitive advantages, as of August 2025.

Note: This share class’ Process Pillar rating and analysis are inherited from an analyst-covered passive share class which tracks the same index: Vanguard FTSE Canada All Cap ETF (SecID: F00000QA9G).

iShares Canadian Fundamental ETF

• Ticker: CRQ
• Morningstar Medalist Rating
  : Bronze
• Morningstar Rating
  : ★★★★★

The C$153.9 million fund has gained 33.85% over the past year, while the average fund in its category is up 18.70%. The BlackRock fund, which launched in February 2006, has climbed 26.05% over the past three years and gained 18.43% over the past five years.

IShares Canadian Fundamental ETF follows a rules-based approach that concentrates on companies with strong fundamentals. However, few constraints make for lopsided sector bets and reduce its appeal.

The exchange-traded fund tracks the FTSE RAFI Canada Index, which weights large- and mid-cap Canadian stocks by a fundamental score. Four financial metrics inform the score: dividends, cash flow, sales, and book equity, with more weight given to stocks with higher scores. Stocks must also meet certain liquidity requirements to ensure they can trade efficiently.

The rationale behind fundamental weighting is reasonable, but the approach carries risks. In theory, breaking the link between stock weights and market capitalization tunes out market noise and provides a more accurate reflection of a company’s size and value. However, there is no consensus way to calculate intrinsic value, and every method lacks precision. Plus, there are many nonfinancial factors that affect a stock’s price.

The portfolio uses broad metrics to determine the value of a stock, but the process has limitations. It doesn’t account for sales or earnings growth, and it lacks sector constraints. As a result, the portfolio exhibits a pronounced value tilt and holds heavier allocations to financial and energy stocks than its average peer in the Canadian equity Morningstar Category. Many of the portfolio’s largest holdings are large banks or energy companies that tend to gravitate toward the value side of the Morningstar Style Box.

The fund is more concentrated than its average peer. It holds less than one-third as many stocks and stows a hefty 51% of assets in its top 10 holdings, compared with 31% for its average peer, as of June 2026. It also favors larger companies, allocating more than the benchmark to giants with strong fundamentals, such as Royal Bank of Canada, over a traditional market-cap-weighted index.

Past performance has been strong compared with peers. It outperformed its average Canadian equity peer by 1.97 percentage points annualized from its February 2006 inception through June 2026. Risk-adjusted returns higher than its average peer, despite higher volatility. Cyclical performance trends of financial and energy stocks should largely drive future fund returns.

iShares Core S&P/TSX Capped Composite Index ETF

• Ticker: XIC
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★

Over the past year, the BlackRock fund rose 23.78%, while the average fund in its category rose 18.70%. The fund, which launched in February 2001, has climbed 23.09% over the past three years and gained 14.68% over the past five years.

IShares Core S&P/TSX Capped Composite ETF offers broad exposure to the Canadian stock market at a low price, a simple formula that few of its peers have been able to beat in the long run.

Tracking nearly the entire Canadian stock market makes this a well-diversified portfolio. It normally tallies around 230 holdings, the top 10 of which represented between 35% and 39% of the portfolio over the past 10 years. That’s usually slightly higher than the category average’s 35%. Sweeping in mid- and small-cap helps diversify the portfolio further, especially when large caps fall out of favor.

This strategy weights stocks by market capitalization, a cost-efficient and proven approach. Market-cap weighting channels the market’s collective view on the relative value of each holding, allowing the fund to coast on the opinions of the crowd without incurring a lot of expenses. It also requires little turnover, a benefit that’s enhanced further by index buffers that are designed to cut back on trading and the costs that come with it.

The shape of this index fund looks a lot like the average portfolio in the Canadian equity Morningstar Category. Its average holding is a bit larger than the category average, but the portfolios sport nearly identical sector compositions and value-growth orientations. Mirroring the category norm indicates that this fund captures the full opportunity set available to its active peers. It also means that the fund maximizes the impact of its cost advantage, a reliable engine for sound category-relative performance.

Sector-level concentration creeps into this portfolio. Heavy stakes in financials (36% of assets as of July 2026) and energy (18%) tend to soak up about half the portfolio. These biases reflect the composition of the Canadian market rather than a flaw in its target index. Still, the fund can suffer when those sectors, or certain industries within them, face challenges.

The fund outperformed its average peer by 1.90 percentage points annualized over the past 10 years through June 2026. The fund’s return fluctuated more than its average peer during that period, but its risk-adjusted performance was still higher. Low fees, low turnover, and little cash allow the fund to capture the Canadian stock market’s performance with minimal drag.

iShares S&P/TSX 60 Index ETF

• Ticker: XIU
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★★

Over the past year, the BlackRock fund rose 23.37%, while the average fund in its category rose 18.70%. The fund, which launched in September 1999, has climbed 22.38% over the past three years and gained 14.41% over the past five years.

IShares TSX/S&P 60 ETF offers broad exposure to the Canadian stock market at a low price, a simple formula that few of its peers have been able to beat in the long run.

S&P builds the index that this exchange-traded fund tracks by targeting the 60 stocks that best represent the Canadian large- and mid-cap market. That normally covers nearly 90% of the market but still makes for a top-heavy portfolio. The 10 largest holdings represented between 43% and 52% of the portfolio over the past 10 years. That’s higher than the category average, but the pedigree of the franchises atop the portfolio dials back firm-specific risk.

This strategy weights stocks by market capitalization, a cost-efficient and proven approach. Market-cap weighting channels the market’s collective view on the relative value of each holding, allowing the fund to coast on the opinions of the crowd without incurring a lot of expenses. It also requires little turnover, a benefit that’s enhanced further by index buffers that are designed to cut back on trading and the costs that come with it.

Save for its larger market-cap orientation, this index fund looks a lot like the average portfolio in the Canadian equity Morningstar Category. The portfolios sport similar sector compositions and value-growth bents. Mimicking the category norm indicates that this fund captures most of the opportunity set available to its active peers. That amplifies the impact of its cost advantage, a reliable engine for category-relative performance.

Sector-level concentration creeps into this portfolio. Heavy stakes in financials (42% of assets as of June 2026) and energy (18%) tend to soak up about half the portfolio. These biases reflect the composition of the Canadian market rather than a flaw in its target index. Still, the fund can suffer when those sectors, or certain industries within them, face challenges.

The fund outperformed its average peer by 2.04 percentage points annualized over the past 10 years through June 2026. The fund’s return fluctuated more than its average peer during that period, but its risk-adjusted performance was still higher. Low fees, low turnover, and little cash allow the fund to capture the Canadian stock market’s performance with minimal drag.

Vanguard FTSE Canada All Cap Index ETF

• Ticker: VCN
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★

The C$17.5 billion fund has gained 23.16% over the past year, while the average fund in its category is up 18.70%. The Vanguard fund, which launched in August 2013, has climbed 23.09% over the past three years and gained 14.84% over the past five years.

Vanguard FTSE Canada All Cap ETF offers broad exposure to the Canadian stock market at a low price, a simple formula that few of its peers have been able to beat in the long run.

Tracking nearly the entire Canadian stock market makes this a well-diversified portfolio. It normally tallies around 200 holdings, the top 10 of which represented between 35% and 41% of the portfolio over the past 10 years. That’s usually slightly higher than the category average’s 35%. Sweeping in mid- and small-caps helps diversify the portfolio further, especially when large caps fall out of favor.

This strategy weights stocks by market capitalization, a cost-efficient and proven approach. Its market-cap weighting channels the market’s collective view on the relative value of each holding, allowing the fund to coast on the opinions of the crowd without incurring a lot of expenses. It also requires little turnover, a benefit that’s enhanced further by index buffers that are designed to cut back on trading and the costs that come with it.

The shape of this index fund looks a lot like the average portfolio in the Canadian equity Morningstar Category. Its average holding is a bit larger than the category average, but the portfolios sport nearly identical sector compositions and value-growth orientations. Mirroring the category norm indicates that this fund captures the full opportunity set available to its active peers. It also means that the fund maximizes the impact of its cost advantage, a reliable engine for sound category-relative performance.

Sector-level concentration creeps into this portfolio. Heavy stakes in financials (37% of assets as of June 2026) and energy (19%) tend to soak up about half the portfolio. These biases reflect the composition of the Canadian market rather than a flaw in its target index. Still, the fund can suffer when those sectors, or certain industries within them, face challenges.

The fund outperformed its average peer by 1.79 percentage points annualized over the past 10 years through June 2026. The fund’s return fluctuated more than its average peer during that period, but its risk-adjusted performance was still higher. Low fees, low turnover, and little cash allow the fund to capture the Canadian stock market’s performance with minimal drag.

Vanguard FTSE Canada Index ETF

• Ticker: VCE
• Morningstar Medalist Rating
  : Gold
• Morningstar Rating
  : ★★★★★

Over the past year, the Vanguard fund rose 23.32%, while the average fund in its category rose 18.70%. The fund, which launched in November 2011, has climbed 22.97% over the past three years and gained 15.01% over the past five years.

Vanguard FTSE Canada ETF offers broad exposure to the Canadian stock market at a low price, a simple formula that few of its peers have been able to beat in the long run.

This fund sweeps in stocks representing the largest 86% of the market, a scope that has included between 48 and 102 holdings over the past 10 years. The top 10 of those represented between 45% and 52% of the portfolio in the same period. That’s a higher share than the category average, but the pedigree of the franchises atop the portfolio dials back firm-specific risk.

This strategy weights stocks by market capitalization, a cost-efficient and proven approach. Its market-cap weighting channels the market’s collective view on the relative value of each holding, allowing the fund to coast on the opinions of the crowd without incurring a lot of expenses. It also requires little turnover, a benefit that’s enhanced further by index buffers that are designed to cut back on trading and the costs that come with it.

This index fund looks a lot like the average portfolio in the Canadian equity Morningstar Category, except for a larger market-cap orientation and a larger portion of financials stocks compared with peers. The portfolios sport similar value-growth bents. Mimicking the category norm indicates that this fund captures most of the opportunity set available to its active peers. That amplifies the impact of its cost advantage, a reliable engine for category-relative performance.

Sector-level concentration creeps into this portfolio. Heavy stakes in financials (41% of assets as of June 2026) and energy (17%) tend to soak up about half the portfolio. These biases reflect the composition of the Canadian market rather than a flaw in its target index. Still, the fund can suffer when those sectors, or certain industries within them, face challenges.

The fund outperformed its average peer by 2.33 percentage points annualized over the past 10 years through June 2026. The fund’s return fluctuated more than its average peer during that period, but its risk-adjusted performance was still higher. Low fees, low turnover, and little cash allow the fund to capture the Canadian stock market’s performance with minimal drag.