2 Top TFSA ETFs to Buy and Hold Forever

Value? Check. Global exposure? Check. All tax-free? Absolutely checked off!

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A Tax-Free Savings Account (TFSA) is like a financial superpower for Canadians looking to grow their wealth without worrying about the taxman. And one of the best ways to flex this superpower is by investing in ETFs (Exchange-Traded Funds). With a TFSA, all the gains you make are completely tax-free. That’s whether they are from dividends, interest, or capital appreciation. This means more money stays in your pocket, which is exactly where it belongs. Plus, there’s no need to worry about reporting your gains to the Canada Revenue Agency (CRA), making tax season a breeze!

ETFs, on the other hand, are like the ultimate investment buffet. You get a little bit of everything, stocks, bonds, or other assets, all bundled into one neat package. By holding ETFs in a TFSA, you can diversify your investments with ease while still enjoying the perks of tax-free growth. Whether you’re aiming for steady income, growth, or both, a TFSA packed with ETFs offers a smart and simple way to build your financial future, all while keeping your earnings safely out of the taxman’s reach.

XAW

Created with Highcharts 11.4.3iShares Core Msci All Country World Ex Canada Index ETF PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

If you’re looking for a one-stop shop to invest in the global markets outside of Canada, the iShares Core MSCI All Country World ex Canada Index ETF (TSX:XAW) might just be your new best friend. With XAW, you get exposure to a world of opportunities, quite literally! This ETF covers a wide range of sectors, from tech and healthcare to consumer goods and financial services. That exposure gives you a diversified portfolio in one neat package. Plus, with nearly 100% of its assets in stocks, it’s designed to capture the growth potential of markets across the globe. All while keeping your investments straightforward and manageable.

One of the standout features of XAW is its heavy allocation to the United States market. This is known for being the engine of global economic growth. Plus, you also get a taste of the action in Europe, Asia, and emerging markets. These areas can offer some serious growth potential over the long term. With a reasonable expense ratio and a solid track record, XAW is a strong contender for anyone looking to build a globally diversified, long-term investment portfolio.

XVLU

The iShares MSCI USA Value Factor Index ETF (TSX:XVLU) is another hidden gem in the vast U.S. stock market. It’s all about value – specifically, capturing companies that trade below true worth. This ETF focuses on solid, established companies with strong fundamentals that might be flying under the radar. With a Price/Earnings (P/E) ratio of just 12.5, it’s clear that XVLU is designed for investors who appreciate getting more bang for their buck. Plus, with a diversified mix of sectors, including technology, healthcare, and financial services, you’re not just getting value. You’re getting a balanced portfolio that can weather market ups and downs.

What makes XVLU particularly appealing for long-term investors is its low beta, sitting at 0.88. This means it’s less volatile compared to the broader market, offering a smoother ride over the years. And with a solid yield of 2.1%, you’re not just relying on capital appreciation. You’re also getting some income along the way. Whether you’re looking to build wealth steadily or just want to add some value-focused investments to your portfolio, XVLU offers a smart, cost-effective way to tap into the U.S. market’s potential. While keeping risk in check.

Should you invest $1,000 in Cineplex right now?

Before you buy stock in Cineplex, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Cineplex wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

A worker gives a business presentation.
Dividend Stocks

Navigating Economic Headwinds and Buying the Dip

If you're looking to get in on the markets, but fearful of the market dip, then here's how to navigate…

Read more »

Canadian Dollars bills
Dividend Stocks

A 10% Dividend Stock Paying Cash Every Month

This dividend stock doesn't only offer a massive income, but a variety of investments during this volatile period.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Income-generating Stocks That Could Accelerate Your TFSA Growth in 2025

Generate tax-free passive income in your TFSA with these two stocks and grow your wealth.

Read more »

woman looks out at horizon
Dividend Stocks

How I’d Invest $8,500 in Canadian Financial Services to Create a Wealth Legacy

Canada’s financial services sector can help you create a wealth legacy from a less than $10,000 investment.

Read more »

Person holding a smartphone with a stock chart on screen
Dividend Stocks

Is BCE Stock a Buy for its Dividend Yield?

BCE stock looks pretty appealing with a 12% dividend yield, but there's more to consider.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

TFSA: Invest $15,000 in This TSX Stock and Create $962.55 in Annual Passive Income

If there's one TSX stock to buy right now, it's this long-term hold that's been around for over 100 years!

Read more »

jar with coins and plant
Dividend Stocks

Earn $500 a Month With These 3 Stocks (Possibly Tax-Free!)

These three monthly paying dividend stocks could help you earn a stable passive income of over $500 monthly.

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

How I’d Structure a $25,000 Portfolio Around These 2 Impressive Dividend Stocks

Here’s how I’d build a dependable income portfolio with just $25,000 by investing in two high-yield TSX dividend stocks built…

Read more »