2 Top TSX ETF Stocks to Buy in February

ETFs are perfect for TSX investors wanting to save time and money while investing in the S&P/TSX.

| More on:
exchange traded funds

Image source: Getty Images

Canadian TSX investors have been trying to add as many stocks to their Tax-Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSP) as possible. But honestly, it’s been a risky place. Which is why a lot of TSX investors may have started looking for exchange-traded funds instead.

Why an ETF?

An ETF offers you the benefit of saving time and money. On average, you’ll pay about $10 in commission fees for every stock trade you make. That’s to either sell or buy. So that’s $20 you have to make up right there if you’re building a portfolio from scratch.

Furthermore, you also have to research to come up with a portfolio that makes sense for your own goals. You don’t want to buy up every risky stock on the market. Sure, every portfolio can handle some risk. But overall, you should be invested in strong long-term stocks for ultimate performance. And that’s a lot of work.

So instead, TSX investors may want to consider an ETF that creates a one-stop-shop for their portfolio. By simply choosing the right one for you, you’ll have access to an entire portfolio of stocks. Better still, it’s managed by a team of professional investors who will constantly juggle investments to optimize performance.

Vanguard Growth ETF

So what ETFs would you like to consider? First up, I’d consider the Vanguard Growth ETF Portfolio (TSX:VGRO). Coming on the market in 2018, it has grown steadily by making solid choices for its TSX investors.

It’s perfect for those seeking easy, long-term growth. The company has an incredible diversity of investments, with over 13,000 equities in a myriad of industries. This gives you access to the top growth stocks on the market, without even being aware of what they are!

Furthermore, it’s a cheap investment in several respects. First, it trades at $31.32 per share, with a management expense ratio (MER) of 0.24% per year. It’s also at a discount, with shares down 3.4% year to date, though up 6.36% in the last year. You also get access to an annual dividend yield of 1.75%.

Based on historic performance, a decade-long investment in Vanguard would potentially lead TSX investors to a portfolio worth $14,153.

iShares S&P/TSX ETF

Another strong option for TSX investors it the iShares Core S&P/TSX Capped Composite Index ETF (TSX:XIC). This ETF invests primarily in Canadian equities, aiming to replicate the performance on the TSX. Coming on the market in 2001, it has years behind it of growth for Canadians to consider.

This ETF is meant for long-term holding, as if you were holding the TSX directly. However, you’re now buying it at an incredibly cheap price, with access to every stock on the market. Not bad for just $34 per share as of writing.

And right now, the ETF offers TSX investors an incredibly low MER of just 0.06%. That’s insanity compared to its peers. Shares are up 1.78% year to date, and 20% in the last year alone! Furthermore, you get a 2.52% dividend yield, which is more than you can say for the TSX through direct investment.

Based on historic performance, if you were to invest in this iShares ETF for a decade, you could potentially have a portfolio worth $15,449.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Stocks for Beginners

stock market
Stocks for Beginners

Where Will the Bear Market Bottom? History Offers a Very Clear Clue

Embrace market corrections by taking the opportunity to buy quality stocks like Fortis (TSX:FTS) at cheaper valuations!

Read more »

A stock price graph showing declines
Dividend Stocks

Here’s Why I’m Confident About Investing Through the Down Market

There is no bear market in history that has not been followed by a bull cycle. Rather than fret over…

Read more »

A bull and bear face off.
Stocks for Beginners

2 TSX Stocks to Buy in a Recession

Are you worried about a recession? Top TSX stocks like Fortis and Dollarama may be perfect investments for a future…

Read more »

edit Close-up Of A Piggybank With Eyeglasses And Calculator On Desk
Stocks for Beginners

How to Turn a $6,000 TFSA or RRSP Into $600,000

You can retire comfortably early if you do some serious retirement planning. Investing regularly in your TFSA and maybe your…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Stocks for Beginners

3 TSX Stocks You’ll Wish You Bought at These Prices

Stocks are currently trading at unbelievable discounts. Here are three TSX stocks you’ll wish you had bought at these prices!

Read more »

funds, money, nest egg
Stocks for Beginners

No Time to Invest? The Easiest Way to Create a Million-Dollar TFSA

Here’s how investors can take advantage of a recent market crash to create a million-dollar TFSA with ease.

Read more »

Volatile market, stock volatility
Bank Stocks

Here’s Why I’m Confident About Investing in a Down Market

This down market continues to trade near 52-week lows, providing you with a small window of time where you can…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Stocks for Beginners

2 Safe Stocks to Buy for a Bear Market

As the market conditions continue to worsen as we begin the fall, safe stocks, such as these two, are some…

Read more »