Here Are My 2 Favourite ETFs for 2026

These two reliable Canadian ETFs that pay attractive distributions are some of the best to buy in 2026 and hold for years to come.

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Key Points
  • In uncertain 2026 markets, favour reliable, high‑quality ETFs—iShares S&P/TSX 60 (XIU) for core Canadian large‑cap exposure and BMO Canadian High Dividend Covered Call (ZWC) for income.
  • XIU delivers diversified exposure to Canada’s biggest blue‑chips with ~2.2% yield; ZWC uses covered calls to boost income to ~5.1% while capping some upside.
  • 5 stocks our experts like better than the BMO Canadian High Dividend Covered Call ETF

As we look ahead to the rest of 2026, assessing the market environment and deciding how to position your portfolio isn’t as straightforward as it has been in some previous years. That’s why some of the best investments to buy in 2026 might be high-quality and reliable ETFs.

There’s still plenty of uncertainty hanging over markets, from geopolitical tensions that have already shown they can flare up quickly, to ongoing questions around interest rates and how long borrowing costs will stay where they are.

At the same time, markets aren’t exactly cheap across the board either. A lot of stocks have already priced in a decent amount of optimism, which makes it harder to just blindly buy growth and hope everything works out.

That’s why 2026 feels like a year where balance matters more than ever. Investors want exposure to high-quality businesses and long-term growth, but many investors also want income, stability, and some downside protection if markets stay choppy or move sideways.

This is why high-quality ETFs are some of my favourite picks for 2026. Instead of trying to pick the perfect stock or guess which sector will outperform next, ETFs let you gain exposure to the market while offering instant diversification to help you lower your risk.

So, with that in mind, two of the best ETFs you can buy in 2026 and plan to hold for years are the iShares S&P/TSX 60 Index ETF (TSX: XIU) and the BMO Canadian High Dividend Covered Call ETF (TSX: ZWC).

ETFs can contain investments such as stocks

Source: Getty Images

Why the XIU is a core ETF for 2026

With so much uncertainty persisting in the stock market, one of the best ways to put your hard-earned capital to work is in an ETF that offers exposure to some of the strongest and most established businesses in Canada, which is why the XIU is a top pick.

The XIU ETF tracks the S&P/TSX 60 Index, which means you’re getting exposure to Canada’s largest and most dominant companies across sectors like financials, energy, telecom, and industrials.

Therefore, if uncertainty persists, you own an ETF offering exposure to some of the safest and most reliable companies in the TSX since these companies tend to hold up better during economic slowdowns, and many of them pay reliable dividends that help support returns even when markets aren’t ripping higher.

At the same time, if the economy starts to improve and volatility in the stock market subsides, you still have exposure to high-quality companies that can continue to grow consistently for years to come.

So, if you’re looking for a reliable ETF to buy in 2026 and hold for years to come, the XIU is undoubtedly a top choice and offers investors a net yield of roughly 2.2%.

Why the ZWC ETF is ideal in an uncertain environment

While the XIU is all about broad exposure and long-term growth, the ZWC is a better choice for investors looking to boost their passive income.

It does that, first and foremost, by focusing on building a portfolio of high-quality Canadian dividend stocks. However, it doesn’t just stop there.

In addition, it also uses a covered call strategy to boost income. By writing covered calls on a portion of its holdings, the ETF generates additional income that gets paid out to investors, resulting in a much higher yield than traditional equity ETFs.

The trade-off is that some capital gains potential is capped. However, that’s not necessarily a bad thing, especially if markets move sideways, grind higher slowly, or struggle to break out meaningfully in 2026. In fact, right now the ETF offers investors a net forward yield of roughly 5.1%.

So, if you’re looking to boost your passive income in 2026 and want a reliable ETF you can buy and hold with confidence, the ZWC is easily one of the top picks for investors today.

Fool contributor Daniel Da Costa 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.

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