Rather than dealing with individual stocks, more investors are turning towards ETFs. More specifically, Canadian ETFs that can offer a mix of defensive appeal, income and growth wrapped in a single package.
Even better, some of these Canadian ETFs can offer a broad, diversified approach that includes components from multiple sectors of the markets. This makes them great options to consider when market volatility causes uncertainty.
The right ETF can counter that market volatility while still catering to long-term growth or income goals.
Here’s a look at three Canadian ETFs I’m considering owning right now.
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VDY offers a high‑yield dividend that’s built for stability
Vanguard FTSE Canadian High Dividend Yield Index (TSX:VDY) is the first of three Canadian ETFs to own. Vanguard FTSE is one of the most popular ETFs in Canada because it leans heavily into the sectors that power the market and provide handsome returns — more specifically, banks, pipelines, and telecoms.
These are components that generate consistent cash flow, which in turn translates into reliable, recurring dividends for investors.
That sector concentration allows the fund to behave predictably and pay a stable and recurring income stream.
As of the time of writing, Vanguard FTSE offers a yield of 3.5% that is distributed on a monthly cadence. This means that even a starter position of $12,000 will generate an income of just over $400, which is more than enough to let compounding work from reinvestments.
ZLB provides low volatility for smoother returns
BMO Low Volatility Canadian Equity (TSX:ZLB) is the second of the three Canadian ETFs to own right now. ZLB takes a different approach from Vanguard FTSE by turning the focus onto lower‑volatility stocks across the broader Canadian market.
This helps the fund reduce drawdown and drastic shifts, in lieu of a more stable performance that can compound over time.
In a year like 2026, where market volatility has remained high, investing in Canadian ETFs that can provide stability like ZLB is a huge bonus for investors.
The fund is able to do this by being overweight in defensive sectors such as financial services, consumer defensive, and utilities. Similarly, the fund is underweight in more cyclical and more volatile picks.
In addition to its defensive positioning, ZLB also provides investors with a respectable quarterly dividend. As of the time of writing, the fund offers a yield of 1.9%.
In short, the fund is not designed to always outperform, but it’s designed to be consistent. For investors looking for a strong defensive anchor, ZLB fits that description.
XIT is the pure‑play Canadian tech ETF with long‑term upside
Wrapping up the trio of Canadian ETFs is iShares S&P/TSC Capped Information Technology Index (TSX:XIT). The iShares Tech index is one of the most concentrated ETFs in Canada, and that concentration is part of its appeal.
The fund provides pure exposure to the Canadian technology sector. This means that the iShares Tech index’s holdings tend to be more growth‑oriented, which also means more volatility.
The flip side is that those holdings also offer considerably more growth potential.
More importantly, this means that the iShares Tech index won’t behave like either the Vanguard FTSE or ZLB, which makes it an even better fit in this trio of Canadian ETFs.
In short, the iShares Tech index adds a growth engine that can help lift overall returns over a longer period.
How these three ETFs fit together in a 2026 portfolio
One of the best things about the three Canadian ETFs mentioned above is how they complement each other.
Vanguard FTSE provides income and exposure to more mature segments of the market. ZLB then provides some income and a defensive tilt. Finally, the iShares Tech index provides growth potential that balances out the other funds.
Together, they create a balanced portfolio that isn’t overly reliant on one ticker or segment.
In my opinion, one or all of these Canadian ETFs should be core holdings in any well-diversified portfolio.
