If you’re new to investing and looking to put your money to work in a Tax-Free Savings Account (TFSA), you’re already off to a smart start. The TFSA is one of the most powerful tools available to Canadians.
Any gains, dividends, or interest you earn inside the account are completely tax-free, even when you withdraw. And in 2025, you can contribute up to $7,000, giving you a fresh chance to grow your wealth.
But here’s a catch many beginners overlook: if you make a bad investment and take a big loss inside your TFSA, you can’t use that loss to offset gains elsewhere. And worse, you lose that contribution room for good. There are no do-overs.
That’s why it’s crucial not to take unnecessary risks with speculative stocks or trendy plays. One of the easiest ways to reduce risk while still aiming for solid long-term growth is to invest in a diversified exchange-traded fund (ETF). Here’s one that’s especially beginner-friendly: BMO Growth ETF (TSX:ZGRO).
Source: Getty Images
What is ZGRO?
ZGRO is what’s known as an ETF of ETFs. That means it doesn’t hold individual stocks or bonds directly. Instead, it owns a mix of other BMO ETFs that together give you exposure to thousands of companies and bonds around the world. It follows an 80/20 asset mix, meaning roughly 80% of the portfolio is in stocks, and 20% is in bonds.
On the stock side, you’re getting a blend of Canadian, U.S., and international equities—everything from large-cap U.S. tech giants to mid-cap Canadian businesses to diversified overseas holdings. The 20% in bonds includes both Canadian and U.S. fixed income, helping to cushion the ups and downs of the market.
That 80/20 mix makes ZGRO suitable for investors in their 20s, 30s, or even 40s who are still building wealth and have time to ride out short-term market dips. It’s also a strong option for anyone who wants growth with a bit of stability without having to actively manage their portfolio.
You’re getting all of this for a management expense ratio (MER) of just 0.20%, which is far cheaper than hiring a financial advisor or building a similar portfolio on your own.
Is ZGRO all I need in a TFSA?
For most investors, especially beginners or those who just want to set it and forget it, ZGRO checks all the right boxes.
It’s diversified across global stocks and bonds, rebalances automatically, pays quarterly income, and charges a low fee. You can build real wealth by simply investing consistently into ZGRO inside your TFSA and holding it over time.
If you do want to get a bit fancier later on, it should be because you’re adding meaningful diversification. That means holding things ZGRO doesn’t include, like gold, bitcoin, or real estate investment trusts. And as you approach retirement, it can also make sense to gradually shift some money into cash or short-term bonds to reduce your risk.
But if you’re just getting started? ZGRO is more than enough.
