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 Yamana Gold right now?

Before you buy stock in Yamana Gold, 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 Yamana Gold 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

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

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »

Dividend Stocks

How I’d Invest $6,000 in Canadian Real Estate Stocks to Build Lasting Wealth

Canadian REITs on sale! See how grocery-anchored retail properties offering 9% yields could turn $6,000 into lasting wealth despite US…

Read more »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Economic Headwinds: Should You Still Consider Buying the Dip?

A market dip might seem like a bumpy road, but it can be far smoother in the future with the…

Read more »

e-commerce shopping getting a package
Dividend Stocks

Consumer Spending Plays Amidst the Current Market Dip

Consumption may go down in market dips, but certain consumer stocks are certainly better off than others.

Read more »

Asset Management
Dividend Stocks

12% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades

Stocks with high-dividend yields carry risks. But they could be a good long-term investment. Here is a 12% dividend stock…

Read more »

Canadian flag
Dividend Stocks

How I’d Build a Foundation of Canadian Value Stocks in My Investment Strategy

Canadian investors can explore iShares Canadian Value Index ETF for value stock ideas to build a foundation for their diversified…

Read more »

Canadian dollars are printed
Dividend Stocks

How I’d Transform a $30,000 TFSA Into a Cash-Flow Machine

Here's why TFSA investors should consider owning dividend stocks such as Mullen Group in 2025.

Read more »

A woman shops in a grocery store while pushing a stroller with a child
Dividend Stocks

Dip Buyers Could Win Big in Today’s Market Dip

If you want to buy the dip, think long-term. Which is why this TSX stock is a top option.

Read more »