The Best Canadian Equity Funds and ETFs to Buy

Exchange-traded and open-end funds can offer easy, inexpensive ways to gain stock market exposure, but there’s a dizzying array to choose from. To help investors find worthy funds focused on Canadian stocks, we’ve screened Morningstar’s Canadian equity category for those with Gold and Silver

, meaning our analysts expect them to outperform their categories’ index or the median over the long term.

What Are Canadian Equity Funds?

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.

The 7 Best Canadian Equity Funds and ETFs to Buy in 2026

We screened for the lowest-cost primary share classes earning a Morningstar Medalist Rating of Silver or Gold with 100% analyst coverage. All the funds and ETFs on the list fall into the Canadian equity Morningstar Category and have at least C$100 million in assets. All data is as of Feb. 10.

1. BMO S&P/TSX Capped Composite Index ETF ZCN
2. iShares S&P/TSX 60 Index ETF XIU
3. iShares Core S&P/TSX Capped Composite Index ETF XIC
4. Vanguard FTSE Canada Index ETF VCE
5. iShares MSCI Min Vol Canada Index ETF XMV
6. Fidelity Canadian Opportunities Class FID647
7. Vanguard FTSE Canada All Cap Index ETF VCN

Because the screen was created with the lowest-cost share class for each fund, some may be listed with share classes that are not accessible to individual investors, or they may be aimed at institutional investors and require large minimum investments. The individual investor versions of those funds may carry higher fees, reducing returns to shareholders. Medalist Ratings may differ among the share classes of a fund.

Morningstar expects the highly rated Canadian equity funds on this list to outperform their peers over a full market cycle. But even though all the funds on our list fall into the same category, they may practice different strategies, and therefore behave differently from each other. Investors need to do some homework to understand exactly what a particular fund invests in before buying.

Here’s a quick look at each of the best Canadian equity funds and ETFs. Be sure to review a fund’s complete report for more details.

BMO S&P/TSX Capped Composite Index ETF

• Fund Size: C$14.7 billion
• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★★

The C$14.7 billion fund has gained 32.91% over the past year, while the average fund in its category is up 26.09%. The BMO fund, launched in May 2009, has climbed 20.73% over the past three years and 15.77% over the past five.

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 (33% of assets as of July 2025) and energy (16%) 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 1.51 percentage points annualized over the past 10 years through August 2025. 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.

Read Morningstar’s full report on the BMO S&P/TSX Capped Composite Index ETF.

iShares S&P/TSX 60 Index ETF

• Fund Size: C$21.4 billion
• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★★

The C$21.4 billion fund has gained 28.29% over the past year, while the average fund in its category is up 26.09%. The iShares fund, launched in September 1999, has climbed 19.18% over the past three years and 15.35% over the past five.

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 ETF 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 a higher share than the category average, but the pedigree of the franchises atop the portfolio dials back firm-specific risk.

Sector-level concentration creeps into this portfolio. These biases reflect the composition of the Canadian market rather than a flaw in its target index.

The fund outperformed its average peer by 1.51 percentage points annualized over the past 10 years through August 2025. The fund’s return fluctuated more than its average peer during that period, but its risk-adjusted performance was still higher.

Read Morningstar’s full report on the iShares S&P/TSX 60 Index ETF.

iShares Core S&P/TSX Capped Composite Index ETF

• Fund Size: C$25.2 billion
• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★★

The C$25.2 billion fund has gained 32.94% over the past year, while the average fund in its category is up 26.09%. The iShares fund, launched in February 2001, has climbed 20.74% over the past three years and 15.77% over the past five.

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. This strategy weights stocks by market capitalization, a cost-efficient and proven approach. Sector-level concentration creeps into this portfolio. These biases reflect the composition of the Canadian market rather than a flaw in its target index.

Read Morningstar’s full report on the iShares Core S&P/TSX Capped Composite Index ETF.

Vanguard FTSE Canada Index ETF

• Fund Size: C$3.2 billion
• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★★

Over the past year, the Vanguard fund rose 28.28%, while the average fund in its category rose 26.09%. The fund, launched in November 2011, has climbed 19.84% over the past three years and 16.15% over the past five.

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 admitted between 48 and 69 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.

The fund outperformed its average peer by 1.78 percentage points annualized over the past 10 years through August 2025. The fund’s return fluctuated more than its average peer during that period, but its risk-adjusted performance was still higher.

Read Morningstar’s full report on the Vanguard FTSE Canada Index ETF.

iShares MSCI Min Vol Canada Index ETF

• Fund Size: C$385.1 million
• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★

Over the past year, the iShares fund rose 21.47%, while the average fund in its category rose 26.09%. The fund, launched in July 2012, has climbed 17.00% over the past three years and 15.05% over the past five.

IShares MSCI Minimum Volatility Canada ETF is a well-designed low-volatility strategy; its ability to weather drawdowns should continue to drive a stellar risk/reward profile.

The MSCI Canada Minimum Volatility Index, the benchmark this fund fully replicates, follows a meticulous set of instructions. It uses an optimizer to carve out a defensive portfolio from the MSCI Canada Index, a broad collection of large- and mid-cap Canadian stocks. The optimizer considers stocks’ individual volatility and how their performance interrelates with other holdings. That holistic view favors steady operators like Intact Financial and Royal Bank of Canada, but it also sweeps in some bumpier stocks that dance to their own tune. For instance, gold miner Barrick Gold is more volatile than most, but its unique performance patterns have kept it in the portfolio since 2015.

Comprehensive portfolio constraints improve this strategy, even if they diminish its defensive chops. The fund ties its stock- and sector-level allocations to the parent index. These constraints reduce concentration and ensure that sectors like consumer defensive and utilities—favorites among simpler low-volatility strategies—don’t overrun the portfolio. Controlling for risk factors like value and momentum prevents incidental style or factor bets. These guardrails may prevent the index from building the most defensive portfolio possible, but they make sure that no unintended bets compromise the low-volatility focus. That’s a worthy trade-off.

So far, the fund has delivered on its goals. Its returns were nearly 15% less volatile than the MSCI Canada Index from its July 2012 inception through March 2025. Its Sharpe ratio, a measure of risk-adjusted performance, ranked in the Canadian equity Morningstar Category’s best quartile over that span. Investors shouldn’t expect this fund to keep pace when the market rallies or excel every single time it wobbles, but its risk/reward profile should measure up well over the long haul.

Read Morningstar’s full report on the iShares MSCI Min Vol Canada Index ETF.

Fidelity Canadian Opportunities Class

• Fund Size: C$405.5 million
• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★★

The C$405.5 million fund has climbed 25.26% over the past year, performing roughly in line with the average fund in its category, which rose 26.09%. The Fidelity International fund, launched in November 2004, has climbed 17.40% over the past three years and 14.67% over the past five.

Fidelity Canadian Opportunities continues to benefit from portfolio manager Hugo Lavallée’s deep experience and patient commitment to his contrarian approach despite challenging near-term results.

Lavallée has managed this strategy since 2008. Over his more than two decades at Fidelity, he’s gained experience across many different sectors and has invested in companies of all sizes. His responsibilities at Fidelity have increased over the years; he has also served as the sole manager of Fidelity Greater Canada since 2011 and Fidelity Climate Leadership since 2021. Lavallée makes all final decisions here but works closely with other managers and analysts to develop investment ideas.

The strategy uses a practical contrarian investment approach. Lavallée doesn’t just chase cheap stocks, he seeks out resilient businesses with capable management teams and solid fundamentals, particularly ones with temporary challenges. This strategy mainly focuses on small- and mid-cap Canadian equities. It can invest in opportunities elsewhere, mostly in the US, and has historically kept its non-Canadian holdings at 10% on average. Fidelity closed the fund to new investors in July 2022 to preserve its capacity to invest in smaller companies.

Lavallée has built an excellent track record. From September 2008 through October 2025, the F series returned 11.1% annualized, beating both the Morningstar Canada category index and the Canadian equity category average by 3.0 and 4.3 percentage points, respectively.

The strategy recently experienced its worst period of underperformance over Lavallée’s tenure. From January 2024 through October 2025, its 11.0% annualized return lagged both the category index and average peer by wide margins. The strategy missed out on strong returns from leading technology stocks and gold miners because it held limited exposure to those areas. Lavallée was building high-conviction allocations to opportunities in other sectors such as materials and industrials.

Read Morningstar’s full report on the Fidelity Canadian Opportunities Class.

Vanguard FTSE Canada All Cap Index ETF

• Fund Size: C$14 billion
• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★

The C$14 billion fund has gained 31.76% over the past year, while the average fund in its category is up 26.09%. The Vanguard fund, launched in August 2013, has climbed 20.82% over the past three years and 15.97% over the past five.

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 a higher share than the category average but 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.

The fund outperformed its average peer by 1.43 percentage points annualized over the past 10 years through August 2025. 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.

Read Morningstar’s full report on the Vanguard FTSE Canada All Cap Index ETF.