Despite a shaky start to the year, the TSX Composite Index continues to make new all-time highs in 2025. Cooling inflationary pressures and better-than-expected economic growth prospects are giving investors plenty to cheer about.
With the economy holding steady and confidence creeping back, now might be the time to look at broad-based opportunities rather than betting heavily on one or two names. Exchange-traded funds (ETFs) make that possible by packaging top Canadian stocks into a single investment you can buy with a click. You get diversification, reduced single-stock risk, and exposure to entire sectors moving in the right direction. Let’s take a closer look at three top Canadian ETFs that offer a smart way to invest in this TSX rally.
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BMO Equal Weight Banks Index ETF
If you want a straightforward way to invest in the Canadian banking sector, BMO Equal Weight Banks Index ETF (TSX: ZEB) delivers exactly that. It focuses entirely on Canada’s largest banks, holding National Bank, Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia, and Bank of Montréal in equal proportions.
As of June 30, 2025, ZEB ETF traded with net assets of nearly $4 billion and offered a 3.8% annualized distribution yield. In the 12 months ended in June 2025, it delivered a 37% return, benefiting from falling interest rates and a rebound in loan growth.
The strong performance was fueled by robust earnings across the sector, improving credit quality, and better-than-expected economic data. Each bank has been supported by higher fee-based revenue and stable mortgage demand.
Overall, the Canadian banking sector’s long history of stability, combined with continued dividend growth and expansion into wealth management and digital banking, makes ZEB a solid ETF pick for seeking stable returns while riding the TSX’s bullish momentum.
iShares S&P/TSX Capped Information Technology Index ETF
From traditional finance, let’s move to Canada’s fast-growing technology stocks. iShares S&P/TSX Capped Information Technology Index ETF (TSX: XIT) mirrors the performance of Canada’s top tech companies, including Shopify, Constellation Software, CGI, and Celestica.
At the end of June 2025, this ETF managed $590 million in assets and posted a massive 37.8% return over the past year.
The ETF’s surge was mainly powered by strong earnings from its top holdings. Shopify continued its growth in e-commerce solutions, Constellation Software expanded through acquisitions, and Celestica benefited from rising demand in electronics manufacturing. These trends pushed the fund’s price-to-earnings ratio to around 43, reflecting the market’s high-growth expectations.
With Canada’s tech sector expanding into artificial intelligence, cloud solutions, and advanced manufacturing, XIT ETF offers a targeted way to tap into long-term innovation trends while keeping diversification within the sector.
iShares S&P/TSX 60 Index ETF
My last ETF pick offers instant exposure to Canada’s top large-cap stocks. iShares S&P/TSX 60 Index ETF (TSX: XIU) is the country’s largest and most liquid ETF, with $16.9 billion in assets as of June 30. It currently holds 61 companies, including RBC, TD, Enbridge, Shopify, and Canadian Pacific Kansas City. The ETF returned 26% in the 12 months ended in June 2025 and currently offers a 2.7% distribution yield.
Its recent performance is mainly supported by strength in the banking, energy, and technology sectors. Its reliable quarterly distributions make it even more attractive for income-focused investors, while the diversified holdings reduce the risk of sector-specific downturns.
For investors wanting one core holding to anchor their portfolio during the TSX’s record-breaking run, XIU remains a dependable choice among the top Canadian ETFs to buy in 2025.
