As we step into 2025, many investors are looking for exchange-traded funds (ETF) – ones that provide a balance between growth and stability, especially given the current market environment. After reviewing several options, I’ve narrowed it down to two top Canadian ETFs for the year ahead. Those being BMO Clean Energy Index ETF (TSX:ZCLN) and Evolve Cyber Security Index Fund – Hedged Units (TSX:CYBR). Both of these ETFs offer unique exposure to high-growth sectors while maintaining solid long-term potential.
ZCLN
ZCLN focuses on the fast-growing clean energy sector, which is expected to thrive as global sustainability efforts increase. The ETF provides exposure to companies in renewable energy, wind, solar, and other green technologies. As governments around the world continue to push for green energy solutions, this ETF stands to benefit from a transition towards sustainable energy sources. At writing, ZCLN has been trading at $12.22, with a slight decrease of 1.1%, reflecting a minor pullback. However, its 2.1% yield and emphasis on utilities make it a reliable pick for long-term growth.
The ETF’s holdings reflect a diverse selection of companies. In fact, over 61% of its assets are allocated to utilities, which has been a consistent driver of performance. Despite recent market turbulence, the future outlook for clean energy remains optimistic, as governments and businesses continue to prioritize sustainability, thus creating strong growth potential for this ETF throughout 2025.
CYBR
On the flipside, cybersecurity remains an ever-increasing concern in our digitized world, making CYBR an attractive option. This ETF is designed to provide exposure to companies in the cybersecurity sector – an industry expected to see massive growth in the coming years. CYBR is positioned in a sector where the demand for security solutions is only going to increase. As businesses ramp up their digital infrastructures, protecting these assets from cyber threats will be paramount. And CYBR is poised to capitalize on this trend.
At $56.00, CYBR has seen a healthy 1.7% increase recently, reflecting positive sentiment in the cybersecurity sector. The ETF’s performance has been solid, with a year-to-date return of 4.4%. However, it’s important to note that cybersecurity stocks tend to have a high level of volatility, making it essential for investors to stay informed on market movements. Despite this, the future outlook for cybersecurity remains robust as both government and corporate sectors continue to invest heavily in protecting sensitive data. The hedge against currency risk adds an extra layer of security for Canadian investors.
With nearly 94% of CYBR’s assets allocated to technology, the fund is highly concentrated in this high-growth sector. The ETF’s focus on leading cybersecurity companies ensures that it benefits from the continued digital transformation and increased global reliance on cloud services, artificial intelligence (AI), and remote work. For those looking to tap into the future of technology, CYBR provides an excellent opportunity to ride the wave of increased cybersecurity spending.
Foolish takeaway
Looking back at past performance, both ETFs have demonstrated strong resilience. ZCLN has been a standout performer in the renewable energy space, driven by its diverse mix of energy companies. While there have been periods of volatility, the long-term trend towards sustainability and green energy continues to support the fund’s positive outlook. Meanwhile, CYBR has delivered consistent growth due to the increasing emphasis on cybersecurity in the digital age. Its high concentration in tech stocks means it’s more susceptible to short-term fluctuations, but its long-term potential is clear.
Therefore, combining these two ETFs gives investors exposure to high-growth sectors. All while maintaining a balanced approach. ZCLN offers a long-term growth opportunity in the renewable energy space, while CYBR provides a way to tap into the technology and cybersecurity boom. Whether you’re looking for growth, income, or a blend of both, these two ETFs are strong picks for 2025. By investing in these funds, you’re positioning yourself to benefit from two of the most promising and resilient industries on the market today.
