3 of the Best ETFs to Buy on the TSX Today

With many factors impacting global stock markets and uncertainty heating up, here are three of the best ETFs you can buy on the TSX today.

Daniel Da Costa

Author Bio Daniel joined The Motley Fool Canada in 2019 and brings experience in banking, investing, and financial analysis. Growing up as the son of a proprietary stock trader and educator, he developed an early interest in financial markets and a passion for helping Canadians improve their financial well-being. His work spans investment research, economic analysis, and econometric modelling, with a focus on understanding the broader forces that influence businesses, markets, and the economy. As an investor, Daniel looks for high-quality businesses with long-term growth potential, reliable income, and attractive valuations. Outside of finance, Daniel enjoys spending time with his family, playing hockey, running, and sailing. Areas of Expertise Investment research, economic analysis, econometric modelling, banking, financial analysis, business fundamentals, long-term investing, dividend investing, and company valuation. Favorite Investment Quote "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." — Warren Buffett

Published March 7, 2022 2:00 pm EST

With all that’s going on around the world today, it might be a good idea for some investors to rebalance their portfolios. And just as there are plenty of stocks that can help you protect your portfolio, a lot of the top investments to buy today are some of the best ETFs on the TSX.

One of the most significant benefits that ETFs offer is instant diversification. So, naturally, in a highly volatile and uncertain investing environment, such as the one we’re in today, buying a high-quality ETF can offer a tonne of advantages.

Therefore, if you’re looking to add stability to your portfolio, here are three of the best ETFs to buy on the TSX today.

ETF chart stocks — Image source: Getty Images

Here’s why this gold ETF is one of the best to buy on the TSX today

Any time uncertainty starts to pick up in markets, one of the best assets to own is gold. That’s why one of the best ETFs to buy on the TSX today is iShares S&P/TSX Global Gold Index ETF (TSX: XGD).

Gold stocks don’t just offer investors exposure to the precious metal. They are actually leveraged to the price of gold. So, when gold prices are increasing, these stocks have even more upside potential.

Plus, by owning the ETF and gaining exposure to a basket of gold stocks, the diversification you get to companies with mines in all parts of the world makes the ETF one of the best and lowest-risk ways to gain exposure to gold stocks on the TSX.

Over the past month, as volatility has ramped up, the XGD has already gained over 20%, showing that the safe-haven asset offers value when uncertainty is growing.

So, if you’re looking for one of the best ETFs to buy on the TSX today that can help protect your portfolio, the XGD is a great choice.

Consider a dividend ETF with some of the best stocks in Canada

In addition to gold, high-quality dividend stocks have also seen a massive increase in demand from investors when uncertainty is rising. That’s why one of the best ETFs to buy on the TSX today has to be iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (TSX: CDZ).

The CDZ offers exposure to some of the top Canadian Dividend Aristocrat stocks — high-quality companies that pay consistently increasing dividends.

Not only are these stocks less volatile in these market environments, but because they pay investors attractive dividends, they are some of the top stocks to own.

So, with the ETF offering investors exposure to 94 high-quality, dividend-paying stocks, a price-to-earnings ratio of just 14.8 times and a distribution that yields upwards of 3.1%, it’s easily one of the best ETFs to buy on the TSX today.

If you’re worried about volatility, this ETF could protect your capital

Lastly, as uncertainty and volatility pick up in markets, it’s a no-brainer to buy a low-volatility ETF. That’s why one of the best ETFs to buy on the TSX today is BMO Low Volatility Canadian Equity ETF (TSX: ZLB).

The ZLB is quite possibly one of the lowest-risk investments you can make gaining exposure to Canadian equities. It offers exposure to the safest, most reliable and low-volatility stocks in Canada. However, it also provides the diversification that all ETFs offer.

This makes it one of the best ETFs on the TSX that you can buy today to protect your portfolio. Unsurprisingly, like gold, it hasn’t just been a lower volatile stock than the market. It’s also gained some value. Plus, because these are some of the safest stocks in Canada that the fund owns, they also pay significant dividends.

So, in addition to gaining exposure to a highly safe portfolio of stocks, investors can also expect to earn a decent distribution, with the ETF currently providing a yield of roughly 2.4%.

Therefore, considering that the risk and uncertainty continue to pick up each day, if you’re looking for a high-quality ETF to buy on the TSX, the ZLB is one of the best.