Best ETFs Canada 2025 for Beginners — XEQT, VEQT, VGRO, XGRO

Why ETFs Are Perfect for Beginners

Exchange-traded funds (ETFs) are the single best way for most Canadians to invest. Instead of picking individual stocks, you buy one fund that holds hundreds or thousands of companies. You get instant diversification, low fees, and returns that closely track the overall market — which outperforms the majority of actively managed mutual funds over the long run.

The four ETFs on this page — XEQT, VEQT, VGRO, and XGRO — are "all-in-one" asset allocation ETFs. Each is a fund-of-funds: it holds several underlying ETFs covering Canadian, US, international, and sometimes bond markets. You buy one ticker, and you own the world.

The Big Four: Quick Comparison

XEQT

iShares Core Equity ETF Portfolio

100% Equity | 0% Bonds

MER: 0.20% | Risk: High

XGRO

iShares Core Growth ETF Portfolio

80% Equity | 20% Bonds

MER: 0.20% | Risk: Med-High

VEQT

Vanguard All-Equity ETF Portfolio

100% Equity | 0% Bonds

MER: 0.24% | Risk: High

VGRO

Vanguard Growth ETF Portfolio

80% Equity | 20% Bonds

MER: 0.24% | Risk: Med-High

XEQT — iShares Core Equity ETF Portfolio

XEQT is the most popular all-equity ETF in Canada. Managed by BlackRock (iShares), it holds four underlying ETFs: a Canadian equity ETF, a US equity ETF, a developed markets ETF (Europe, Japan, Australia, etc.), and an emerging markets ETF. The result is exposure to roughly 9,000+ stocks across the globe.

Holdings breakdown (approximate):

~45% US equities (via XUU)
~25% Canadian equities (via XIC)
~23% International developed markets (via XEF)
~7% Emerging markets (via XEC)

At 0.20% MER, XEQT costs just $2.00 per year for every $1,000 invested. This is dramatically cheaper than typical Canadian mutual funds, which often charge 2.0–2.5% ($20–$25 per $1,000).

XEQT is best for: investors with a time horizon of 10+ years who can stomach short-term volatility for maximum long-term growth potential.

VEQT — Vanguard All-Equity ETF Portfolio

VEQT is iShares' closest competitor and is equally excellent. Managed by Vanguard, it also holds 100% equities but with a slightly different geographic weighting — VEQT has a larger home bias toward Canada (about 30% Canadian) compared to XEQT's 25%.

Holdings breakdown (approximate):

~42% US equities
~30% Canadian equities
~22% International developed markets
~6% Emerging markets

VEQT has a slightly higher MER of 0.24% vs XEQT's 0.20%. Over a 30-year investment horizon, that 0.04% difference amounts to a meaningful but not enormous sum. Both are exceptional products. If you're investing with Questrade or Wealthsimple Trade, either works perfectly.

XGRO vs VGRO — Growth Options with Bonds

XGRO and VGRO are both 80% equity / 20% bond allocations. The bond component (typically Canadian and global government bonds) reduces volatility. If 100% equity feels too aggressive for your situation — for example, you might need the money in 5–8 years — adding 20% bonds smooths out the ride.

In a bad year like 2022, XEQT/VEQT dropped roughly 12–15%, while XGRO/VGRO dropped roughly 10–12%. Not a massive difference in bad years, but the bond cushion can help investors stay the course without panic-selling.

  Which should you choose? If you're under 40 and won't touch the money for 15+ years: pick XEQT or VEQT. If you're closer to retirement or more risk-sensitive: XGRO or VGRO. If you can't decide between iShares and Vanguard: flip a coin — both are excellent.

MER Cost Calculator

Investment amount ($): Choose ETF:

Where to Buy These ETFs

Broker	ETF Purchase Fee	Best For
Wealthsimple Trade	$0 (CAD)	Beginners, small accounts
Questrade	$0	ETF-focused investors
Interactive Brokers	$0 (Lite)	Sophisticated investors
TD Direct Investing	$9.99/trade	Bank customers wanting one platform
RBC Direct Investing	$9.95/trade	RBC clients

For beginners, Wealthsimple Trade or Questrade are the obvious choices. Both let you buy XEQT or VEQT commission-free inside a TFSA or RRSP.

Step-by-Step: Start Investing in ETFs

Open a TFSA first — most Canadians should max their TFSA before any other account. Tax-free growth is too good to ignore.
Pick a broker — Wealthsimple Trade or Questrade are best for beginners with no commission on ETF purchases.
Choose your ETF — for most under-40 Canadians: XEQT or VEQT. Pick one and stick with it.
Set up automatic contributions — monthly contributions via Wealthsimple or pre-authorized purchases via Questrade keep investing effortless.
Don't check it every day — the data is clear: investors who check less frequently make better decisions.

Frequently Asked Questions

XEQT vs VEQT — which is better? +

Both are excellent. XEQT has a 0.20% MER (slightly cheaper) and a smaller Canadian equity weighting (~25%). VEQT has 0.24% MER and a larger Canadian tilt (~30%). The difference in long-term returns will be minimal. Pick one and stay consistent.

Should I hold XEQT in a TFSA or RRSP? +

Either works. For most Canadians, filling your TFSA first makes sense. RRSP is better if you're in a high tax bracket now and expect to be in a lower bracket in retirement.

Is XEQT safe to invest in? +

ETFs are as safe as the underlying holdings — you own stakes in thousands of global companies. The main risk is market risk (the value goes down when markets drop). They are not like savings accounts and will fluctuate. For long-term investors, this is generally acceptable.

What is the best ETF for a beginner in Canada? +

XEQT or VEQT are the most commonly recommended single-fund portfolios for beginners in Canada. They provide global diversification at a very low cost. XGRO or VGRO are good if you want some bond exposure.