In my view, passive investing is about to become the single trend more and more investors will have to get behind. Given the amount of time and effort required for investors to research individual stocks and pick winners correctly in key industries, stock picking can be difficult, time-consuming, and costly.
Thus, I’m a fan of investing in key exchange traded funds (ETFs). These three top Canadian ETFs are among my top picks right now, and I think long-term investors will do well owning these funds in 2026 and beyond.
So, without further ado, let’s dive in!
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iShares S&P/TSX 60 ETF
The iShares S&P/TSX 60 ETF (TSX:XIU) is the largest Canadian ETF in the market, at least in terms of assets under management.
This ETF has seen very impressive performance over the course of the past year. In fact, stretching back two years, XIU has roughly doubled, suggesting that global investors are increasingly looking at the Canadian market as not only a safe place to invest, but one which provides plenty of capital appreciation upside over time.
I think that’s a fair assessment. Given the commodity bull cycle we’re seeing in key areas of the market such as precious metals and a range of other minerals, Canada’s resource-heavy economy is one global investors are likely to continue to come back to.
Assuming the momentum we’ve seen in recent years continues, this is a top ETF to own in my books.
BMO S&P 500 Index ETF
Next on this list, we have the BMO S&P 500 Index ETF (TSX:ZSP), for investors who want to add a bit more U.S. exposure to their portfolios right now.
Of course, the Canadian market (and that of many other developed nations) outperformed the U.S. market this past year. Additionally, there’s a growing chorus of investors who think this trend may continue for some time. There’s good reason for this, given surging deficits south of the border and heightened concerns tied to trade policy, geopolitics, and an increasingly bubbly environment for U.S.-based AI stocks.
That said, I do think the U.S. economy will continue to be the tech powerhouse for the global growth story for decades to come. If we do see a material drawdown in valuation multiples across these two markets, I’d be looking to add exposure to a top ETF such as the ZSP.
This ETF is one of my long-term picks for Canadian investors looking to be diversified and not lose out on the amazing growth the U.S. has historically produced. For those who think this base case isn’t likely to change anytime soon, this is a top option to consider right now.
iShares Core Canadian Universe Bond Index ETF
Last, but certainly not least on this list of top Canadian ETFs to consider right now, is the iShares Core Canadian Universe Bond Index ETF (TSX:XBB).
That’s because bond prices have been very weak in recent years, thanks to a coordinated tightening of monetary policy by central banks around the world. In short, investing in bonds has weakened portfolio returns recently, something which has turned many investors off from this asset class altogether.
That said, I’m of the view that the hedging benefits of owning some fixed income assets, as well as the potential upside in a recessionary environment, are worth something. We’re seeing valuations in most developed markets surge to levels we only typically see before a major pullback.
Accordingly, for long-term investors who want to sleep well at night with their portfolio construction, I think adding some XBB exposure makes sense right now.
