Building an income-producing portfolio sounds simple until you actually start doing it. One day you’re looking at bank stocks, the next you’re comparing pipelines, utilities, energy companies, and telecoms, wondering which dividend payers deserve your money. Before long, you’ve spent hours researching and still aren’t sure you’ve made the right call.

That’s a problem many Foolish investors run into. That’s why focusing on a group of proven dividend stocks could be a better strategy than relying on a single company or industry. It can provide more dependable income and give investors greater confidence over the long term. That’s exactly why top Canadian exchange-traded funds (ETFs) look so attractive. For example, the TSX-listed iShares S&P/TSX Composite High Dividend Index ETF (TSX: XEI) could be one of the smartest additions to a long-term income portfolio. Let me explain why.

Why this dividend-focused ETF looks attractive

The XEI ETF mainly tracks the S&P/TSX Composite High Dividend Index, giving investors exposure to a broad portfolio of Canadian dividend-paying stocks. Instead of leaning on one company or one industry, the fund spreads money across 75 holdings listed on the Toronto Stock Exchange. Its top positions include blue-chip stocks such as TD Bank, Royal Bank of Canada, Suncor Energy, TC Energy, and Enbridge.

Those holdings help explain why the fund has become a great option for income investors. As of May 31, 2026, XEI had around $4 billion in net assets, a distribution yield of 3.7%, and a 12-month trailing yield of 3.6%. It also carries a management expense ratio (MER) of just 0.22%, which leaves more of the income stream in investors’ pockets over time.

More importantly, this ETF is not just about yield, as XEI gained 20.7% over the last year, while its annualized five-year return came in at 15.8%.

Income, scale, and staying power

A lot of Canadian investors want dependable income, but they also want protection from putting too much money into one idea. XEI ETF offers a practical middle ground. Its top 10 holdings account for about 46.7% of the portfolio, while the rest of the fund still reaches across different market sectors. That diversification could soften the blow when one area slows down, and another picks up the pace.

The ETF’s long-term record adds even more weight to its appeal. Notably, a hypothetical $10,000 investment at the fund’s launch in April 2011 would have grown to $39,685 by the end of May 2026. That compounding matters because it shows the fund has been able to blend capital growth with a steady stream of monthly payouts over a long stretch of market cycles.

Foolish takeaway

Clearly, XEI ETF looks like a smart fit for investors who want broad Canadian exposure without turning portfolio building into a full-time job. The fund offers income, high-quality holdings, and a sensible cost structure in one place. With strong recent performance and a portfolio built around proven dividend payers, XEI could be a great ETF to own forever.

The post If You’re Not Investing in This Winning ETF, You Need to Ask Yourself Why appeared first on The Motley Fool Canada.

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• Want to Build Your Own Pension? Here’s How Canadian Dividend ETFs Can Help
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• 3 Surging Canadian ETFs I’d Add to My TFSA Right Now
• Here’s How I’d Turn a TFSA Into $800 a Month, Tax-Free

Fool contributor Jitendra Parashar has positions in Enbridge and Toronto-Dominion Bank. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

The U.S. is the world’s biggest stock market where many attractive dividend and growth stocks trade. From Micron Technology to Pfizer, you can get exposure to global leaders of various profit-making sectors. The Canada Revenue Agency (CRA) allows Canadians to buy US stocks trading on the Nasdaq and NYSE through the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). However, the tax benefits of a TFSA come with fine print when holding US stocks.

The fine print of holding U.S. stocks in a TFSA

You can earn from a stock through capital appreciation or dividends. Both fall under different tax brackets. The Internal Revenue Service (IRS) taxes dividends as “Income from Other Sources”. When a non-resident American earns this income, the IRS imposes a 30% withholding tax before crediting the dividend to the beneficiary’s account. Thanks to the US-Canada tax treaty, Canadians face a 15% withholding tax provided they submit the necessary forms with their broker and claim the benefit.

The capital appreciation falls under capital gains tax. This tax is paid by the non-resident in their resident country. In Canada, TFSA investments are allowed to grow tax-free. Thus, if you hold US stocks in a TFSA, you are subject to the IRS’s 15% withholding tax on dividends but benefit from the CRA’s tax-free capital gain.

However, the IRS allows dividends to grow tax-free in an RRSP, as it is a retirement account.

The TFSA only accepts Canadian dollar values

Another fine print point to note for a TFSA holding US stocks is that all values have to be converted into Canadian dollars. The CRA determines TFSA contribution room in Canadian dollars, and even if you invest in US stocks, you have to ensure the investment does not exceed the Canadian dollar limit.

Non-residents cannot invest in a TFSA

Now, if you work in the United States and become a non-resident in Canada, because you stayed 183 days or more out of Canada in a tax year, you cannot invest in a TFSA. The TFSA benefit is only for Canadians. Any contributions made as a non-resident would attract a penalty of 1% per month. As a non-resident, you can’t even accrue new contribution room.

So be careful where you invest in US stocks and know your tax residency before investing through a TFSA.

How to get exposure to US stocks through a TFSA in a tax-efficient manner?

Navigating the fine print, a tax-efficient way to get exposure to US stocks in a TFSA is to buy Canadian Depository Receipts (CDRs) of US stocks. With CDRs, you can buy fractional shares of global tech companies on Canadian exchanges in Canadian dollars. CDRs remove the hassle of currency conversion and hedge your exposure to exchange rate fluctuations. Companies like Micron, SpaceX, and Broadcom have their CDRs listed on the TSX.

Another tax-efficient way to get US stock exposure is through US ETFs trading on the TSX and currency hedged. The iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSX: XQQ) replicates the Nasdaq 100 Index and charges a minimal management fee of 0.35% annually. It calculates the fee on your total investment, irrespective of the performance. If you invest $10,000 in the first year, $35 is charged. If your investment grows to $20,000 in the third year, $70 is charged. This fee is not charged separately but is adjusted to your net asset value.

However, the XQQ ETF’s 39% year-to-date return and 20% average annual return in 10 years make the fee a drop in the ocean. In fact, it is a cost-efficient way to benefit from the artificial intelligence (AI) sector. All AI players trade on the Nasdaq, from AI chipmakers to AI application developers, and AI infrastructure providers. Nasdaq will not only capture the AI revolution but all future tech revolutions like self-driving cars, space travel, and robotics.

Investing tip

The TFSA is a great investment tool as it lets your money grow tax-free. A stock that can grow multiple-fold and help with wealth creation is best placed in a TFSA, as it can save you a significant amount in tax, especially if you fall under a higher tax bracket.

The post The Fine Print Most Canadians Miss When Holding U.S. Stocks in a TFSA appeared first on The Motley Fool Canada.

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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom, Micron Technology, and Pfizer. The Motley Fool has a disclosure policy.

To build wealth from the stock market, Tax-Free Savings Account (TFSA) investors don’t always need to find the next hot stock. In fact, some of the most successful investors have done the opposite. They focused on broad diversification, stayed invested through market ups and downs, and let time do most of the heavy lifting.

That’s one reason exchange-traded funds (ETFs) have become such a popular choice among Canadian investors. A well-constructed ETF could provide exposure to entire markets, sectors, and economies without requiring constant attention. In addition, many of these funds come with low fees, making it easier for more of your TFSA money to stay invested and compound over time.

When I think about top Canadian ETFs to buy for a TFSA, I’m drawn to funds that offer a combination of diversification, staying power, and strong long-term potential. In this article, I’ll spotlight two such ETFs you can consider adding to your TFSA right now and hold forever.

Vanguard All-Equity ETF Portfolio

For investors looking for top Canadian ETFs to buy and forget about for years, Vanguard All-Equity ETF Portfolio (TSX: VEQT) could be a strong place to start.

VEQT is designed with a simple objective in mind. The ETF seeks long-term capital growth through a portfolio invested entirely in equities. Instead of relying on a handful of companies, it spreads investments across Canada, the United States, international developed markets, and emerging markets.

That broad diversification is one of the biggest reasons I’d be comfortable holding it in a TFSA and rarely touching it. As of May 2026, VEQT provided exposure to more than 13,700 stocks around the world. A portfolio that wide helps reduce the risk that comes with depending on any single company, sector, or country.

Another attractive feature is its low-cost structure. In November 2025, Vanguard reduced the fund’s management fee to 0.17%, while its management expense ratio (MER) stood at 0.24%. Lower fees leave more money invested, which can make a noticeable difference over decades of compounding.

Vanguard All-Equity ETF’s sector exposure is also well balanced. Technology represents its largest allocation at 26.2%, followed by financials at 19.7% and industrials at 11.8%. That mix gives investors exposure to some of the world’s largest growth industries while still maintaining diversification across the broader economy.

For TFSA investors seeking long-term growth with minimal maintenance, VEQT ETF checks many of the boxes that make it worth holding indefinitely.

iShares S&P/TSX Composite High Dividend Index ETF

If VEQT is built around global growth opportunities, iShares S&P/TSX Composite High Dividend Index ETF (TSX: XEI) leans into the strength of Canada’s top dividend stocks.

This ETF mainly tracks the S&P/TSX Composite High Dividend Index and focuses on Canadian stocks with strong dividend-paying histories. According to BlackRock, the fund seeks long-term capital growth while replicating the performance of the index, net of expenses.

One reason long-term TFSA investors may appreciate this ETF is its monthly income stream. The fund pays monthly distributions and had a distribution yield of about 3.7% as of May 2026. For investors who like the idea of regular cash flow while remaining invested, that can be a valuable feature.

The iShares S&P/TSX Composite High Dividend Index ETF’s top holdings include Toronto-Dominion Bank, Royal Bank of Canada, Suncor Energy, TC Energy, Enbridge, Canadian Natural Resources, Bank of Montreal, Nutrien, Canadian Imperial Bank of Commerce, and Bank of Nova Scotia.

XEI has also rewarded patient investors over time. The ETF turned a hypothetical $10,000 investment at inception in 2011 into $39,685 by May 2026. In addition, it generated a 43.1% one-year return and a 15.8% annualized return over five years.

No ETF is perfect for every investor. However, for Canadians who want a combination of dividend income, exposure to established Canadian companies, and long-term growth potential, XEI remains one of the top Canadian ETFs to buy for a TFSA.

The post 2 Canadian ETFs I’d Lock Into a TFSA and Never Touch appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has positions in Bank of Montreal, Canadian Natural Resources, Enbridge, and Toronto-Dominion Bank. The Motley Fool recommends Bank of Nova Scotia, Canadian Natural Resources, Enbridge, and Nutrien. The Motley Fool has a disclosure policy.

The Tax-Free Savings Account (TFSA) contribution limit for 2026 is $7,000. What is your investing strategy for this year? Seeing how things are shaping up, Canadian energy, artificial intelligence (AI), real estate, and insurance stocks are trading near their all-time high. This bull run comes after several years of flat growth from 2022 to mid-2025.

The 3-stock TFSA strategy for 2026

While trade-related stocks and traditional software companies are showing tepid performance, energy and AI stocks continue to make new highs. This makes one skeptical of buying these stocks near their highs. Here is a three-stock TFSA strategy that helps you tap the trend, reduce downside risk, and benefit from a recovery rally.

One stock to tap the AI trend

The trend of AI is here to stay, and a Canadian stock that will benefit from it is Celestica (TSX: CLS). The original design manufacturer supplies Ethernet switches for network infrastructure. Celestica builds switches on Broadcom chipsets. It already has three hyperscaler clients, and even one can significantly increase revenue.

Celestica’s stock price fell 18% in June as Broadcom posted lower-than-expected earnings. However, the earnings and guidance were intact. The dip is due to over-expectations priced into the share price. A single quarter of earnings does not define the overall long-term growth.

The dip is an opportunity to buy Celestica as the orders are still intact. Considering that AI data centres are still being built on a humongous scale, Celestica stock still has more growth left.

One stock to reduce downside risk

While Celestica can help you tap the AI trend, Lundin Gold (TSX: LUG) can reduce downside risk as energy prices cool. Many countries have spent a significant portion of their foreign reserves buying oil. Central banks worldwide could buy more gold at a further accelerated rate to diversify trade partners and build more buying power.

That could drive the gold price up. I won’t be surprised if it reaches $5,000/oz and stays there. At present, the gold price is around $4,200/oz, which is still higher than Lundin’s all-in sustaining cost of $1,114 in the first quarter of 2026. If the Fed increases the interest rate, the gold price may fall. However, central banks’ gold buying will keep the gold price elevated, and you can enjoy high dividends during this period. Lundin Gold’s dividend policy suggests $300 million in free cash flow will be used for a $0.30 fixed dividend per share, and any surplus will go towards a variable dividend.

The company declared $0.91 in variable dividend per share in the first quarter, as its average realized price was $4,951/oz.

One stock to benefit from the recovery rally

Descartes Systems (TSX: DSG) stock has slipped 43% since 2025, when the US tariff war began. Since then, the supply chain management company has been struggling to make ends meet. Despite trade uncertainties, Descartes has sustained its revenue growth and Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) through acquisitions. Its Global Trade Intelligence solutions have been bringing in regular cash flows. Despite strong fundamentals, the share price has been weak.

The stock price recovery will come, but when it is difficult to say. The strategy is to buy the dip and hold it for the long term, as the recovery rally could drive the share price up more than 100%.

How to invest through a TFSA

Investors can allocate their $7,000 TFSA contribution across the three stocks in a 30:30:30 ratio and allocate the remaining 10% to the iShares NASDAQ 100 Index ETF (CAD-Hedged). The ETF can give technology sector exposure and help your portfolio generate market-linked returns.

The post Here’s the 3-Stock TFSA Strategy I’d Use in 2026 appeared first on The Motley Fool Canada.

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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom, Celestica, and Descartes Systems Group. The Motley Fool has a disclosure policy.

2026 is the year of artificial intelligence (AI) and energy, and your Tax-Free Savings Account (TFSA) strategy should place the portfolio that invests in both against and in favour of rising AI and energy stock valuations.

Should you buy stocks with lofty valuations?

SpaceX debuted on the stock market, while Anthropic and OpenAI will soon follow with their initial public offerings (IPOs), making AI a competitive sector. Thus, it is no surprise that the few good AI chip stocks with lofty valuations are feeling the heat of competition and correcting aggressively. In the meantime, geopolitical tensions are keeping energy prices stressed. However, such high prices can’t last, as these hikes aren’t due to excess demand but to a logistics bottleneck. If the 1980s oil crisis resurfaces, energy stocks could crash if customers adopt alternatives to oil and gas.

If these risks materialize, AI chip and energy stocks may not return to their current highs for decades. In such uncertainty, your TFSA strategy should be to invest both in favour of, as well as against, the trend.

Buying into the 2026 trend through a TFSA

Buying into the trend will give you exposure to any further upside left in the trend. A lucrative way to invest in AI is through the iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSXX:XQQ). The ETF replicates the Nasdaq 100 Index, which includes the entire AI supply chain from semiconductor to data centre companies to AI applications. Even Canadian tech companies growing at a faster rate have listed on the Nasdaq.

Anthropic and OpenAI will also list on Nasdaq after their IPO, giving you exposure not only to the AI supply chain but also to other emerging technologies like space exploration and satellite communication.

The XQQ ETF will charge an annual management expense ratio (MER) of 0.39% on your portfolio value. If you invest $10,000, $39 will go towards MER. If your $10,000 becomes $20,000 in the fifth year, $78 will go towards MER. The ETF’s 20% average annual growth rate makes 0.39% a small price to pay for such strong returns. Riding the AI rally, the ETF has already surged 30% from its March dip. If this rally continues, you can benefit from it even if the AI rally shifts from chip stocks to pure-play AI applications.

Buying against the trend and into defensive stocks

On one hand, you are investing in the trend. On the other hand, you should consider investing in defensive stocks if the AI and energy bubbles burst. The growing uncertainty makes gold stocks a lucrative investment. In a normal economic scenario, gold stocks would only command 2–3% of your portfolio.

Lundin Gold (TSX: LUG) is a good TFSA investment for the next two years as gold prices fluctuate. Central banks worldwide are buying gold at an accelerated rate to build a sizeable gold reserve as the credit rating of US Treasury bonds falls. Gold prices continue to trade above $4,300 after crossing $5,300 in January to March 2026. Energy shocks, an AI bubble burst, or falling interest rates cannot be ruled out, and you cannot tell if these risks will even materialize. Consider Lundin Gold as insurance against these risks.

Lundin Gold has one of the lowest all-in sustaining costs (AISC), zero debt, and a dividend policy that gives a bonus dividend on free cash flow above $300 million. All this makes it a better gold stock to buy in a TFSA, as its 6.4% dividend yield will give you tax-free payouts.

The 2026 TFSA strategy

Tech stocks have soared to levels at which investors are questioning valuations. AI is being tested for returns before it asks for more funds. Investing is about taking calculated risks and not going full-blown into one stock in which your wealth depends on the success of a few, rather than the success of the trend at large. The TFSA’s unique benefit of making your investment income and gains tax-free makes it an ideal vehicle to buy high-growth stocks and book profits on every upcycle.

The post The 2 Stocks I’d Combine for a Strong TFSA Strategy in 2026 appeared first on The Motley Fool Canada.

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• Could These 3 Canadian Stocks Build Generational Wealth? 

Fool contributor Puja Tayal 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.

The 2026 Tax-Free Savings Account (TFSA) contribution room is $7,000 for Canadians of all ages and income brackets. The TFSA gives everyone an equal opportunity to generate tax-free wealth. You can make the most of this opportunity by maxing out on your contribution room, either by investing $7,000 in one go or by investing $575 every month, with an extra $100 added from your annual bonus.

How to grow your 2026 TFSA contribution into $70,000

Every investor wants their money to grow tenfold, but not everyone is ready to take risks or spend time in the market. For $7,000 to become $70,000, your investment should grow at a compounded annual growth rate (CAGR) of 26% for 10 years, a return that only high-growth, high-risk stocks can give. Otherwise, you should invest in a portfolio with a 12.2% CAGR for 20 years.

High-growth stocks to invest your 2026 TFSA contribution

Some high-growth stocks worth considering buying in 2026 are Ballard Power Systems (TSX: BLDP), Topicus.com (TSXV: TOI), and the iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSX: XQQ). Each carries high risk but has the potential to grow 10 times in the next 10–20 years.

A high-risk stock for a 26% CAGR

Ballard Power Systems’ stock fell 32% in June as its Weichai Power joint venture (JV) nears the end, with Weichai offloading Ballard’s shares. This joint venture was loss-making, as changes in China’s regulations continued to create uncertainty around product sales. With Weichai’s interference reduced, Ballard has greater control over its business. The company has also hired professional management to make the unit economics work.

Taking Weichai out of the equation, Ballard can now focus on its order book. The company’s stock is not affected by order wins but by regulatory changes and its bottom line. Ballard reported its first gross profit in 2025 and continued the momentum in the first quarter of 2026. However, investors priced in high-growth expectations as the stock surged 210% between March and May 2026. One reason was the US-Iran war, creating demand for energy alternatives. Another reason was its gross profit.

Ballard stock will test your patience, but it can convert $7,000 to $70,000. All you have to do is buy the dips and wait for growth spurts to book profits so that you can buy more shares in the next dip.

Suppose you bought 1,000 shares in 2025 at $3.50, when the share price crossed $7 in May 2026, you could have booked a $3,500 profit by selling 500 shares. So even when the stock fell 33% in June, you benefited from the growth. The profit can later be used to buy more shares when the stock is oversold. A measure of oversold stock is the Relative Strength Index (RSI) of 30. Its current RSI is 41.

A TFSA ETF for a 20% CAGR

You could balance the risk from Ballard by investing a major portion in the iShares NASDAQ 100 Index ETF (CAD-Hedged). The ETF replicates the Nasdaq 100 Index. The beauty of this Index is that it not only captures the top brass but also the emerging mid-caps. Nasdaq is currently at an inflection point, as OpenAI, Anthropic, and SpaceX list on the exchange. The moonshot projects are now going public, which means they are ready to commercialize this tech and meet the stringent requirements of retail investors.

The XQQ ETF can give you the upside of these new entrants while balancing the downside risk from mature tech companies. No matter which artificial intelligence (AI) company takes the market share, you will benefit from having exposure to the entire supply chain. The XQQ ETF has generated a 20% average annual return in 10 years. The addition of pure-play AI companies could accelerate the returns.

A growth stock for a 17% CAGR

Moving to a less risky stock, Topicus.com is a holding company of vertical-specific software (VSS) companies with sticky cash flows. The risk is that AI adoption provides competition to VSS, but normalization of AI adoption could set the tone for a world where VSS and AI collaborate rather than compete, and that could drive Topicus.com’s share price.  

The post How to Grow Your 2026 TFSA Contribution Into $70,000 or More  appeared first on The Motley Fool Canada.

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The Motley Fool has positions in and recommends Topicus.com. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

Holding a single-stock portfolio is every so often a unique reality for many company founders, employees who got rich through equity ownership schemes, and heirs of concentrated portfolios. However, there’s significant company-specific risk exposure for such highly concentrated portfolios. Financial advisors often spend a lot of time crafting complex strategies to diversify risks and “liquidate” single-stock portfolios without triggering immediate tax consequences.

But what if you aren’t a founder or an heir, and you simply want a low-maintenance, bulletproof investment strategy? If you were forced to choose just one single equity position to buy and hold for the long haul, you would want a secure, foundational long-term holding.

Instead of gambling on an individual business, the smartest move is to cheat the question slightly and buy a single ticker, an exchange traded fund (ETF), that behaves like an entire diversified portfolio, and pays monthly dividends: the iShares S&P/TSX Composite High Dividend Index ETF (TSX: XEI).

XEI ETF: Instant diversification with Canadian high-dividend-yield blue chips

While the iShares S&P/TSX Composite High Dividend ETF trades like an ordinary stock on the Toronto Stock Exchange, it’s a low-cost index ETF that seeks long-term growth by cheaply bundling a $4.1 billion portfolio of high dividend yield Canadian stocks. Rather than tying your financial future to the fortunes of a single corporation, the XEI ETF spreads your investment risk across 75 different holdings, prioritizing top-tier high-yield Canadian blue-chip stocks.

Furthermore, investors gain wide sector diversification across the strongest pillars of the Canadian economy. The ETF’s largest sector allocations include financials at 32.8%, energy sector stocks at 29.6%, utilities at 12.8%, with communication, consumer discretionary and real estate stocks contributing significant weights at 7.8%, 5.9% and 4.2% respectively.

Best of all, this comprehensive diversification doesn’t come with a hefty fee. The XEI ETF features a low Management Expense Ratio (MER) of 0.22%, which translates to just $2.20 per every $1,000 invested. Keeping your investment costs low leaves much of the net return intact to compound over time.

A reliable monthly dividend growth ETF

For long-term buy-and-hold investors, steady cash flow is a massive advantage. The XEI ETF satisfies this need beautifully by paying out a reliable monthly dividend income, currently boasting an annual dividend yield of 3.6%.

Even better, these payouts may keep growing because most of the ETF’s index constituents are proven dividend growth stocks. For instance, its holdings include utility giant Fortis stock, which has raised its dividends every single year for 52 years and counting.

In fact, at the time of writing, about 45% (nearly half) of the XEI ETF’s holdings are among the 96 constituents of the premium iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (TSX: CDZ). This means nearly half of XEI’s portfolio consists of elite dividend stocks that have successfully raised their payouts consistently over the past five consecutive years. This high-quality roster has driven XEI’s overall dividend to grow by a staggering 130% since 2011.

Tremendous historical outperformance

The XEI ETF is much more than just a defensive income play — it has proven to be a total return powerhouse. Year-to-date, the ETF has already generated an impressive 22.4% total return.

Looking at the bigger picture, since its inception in 2011, investors who bought and held the iShares S&P/TSX Composite High Dividend Index ETF could be sitting on a stellar 335% total return on this single ETF position. On a total return basis, since its 2011 inception, the XEI ETF has comfortably outperformed the broader S&P/TSX Composite Index’s total return of 291%.

XEI data by YCharts

When you break down those historical gains, the XEI ETF’s monthly dividend did the heavy lifting, supplementing a 99% capital gain to deliver that massive total return.

The Foolish bottom line

If you are looking to invest in a single ticker that offers comprehensive sector diversification, low management fees, consistent monthly cash flow, and long-term historical outperformance, the XEI ETF appears appealing. It’s an eligible foundational holding to buy and hold for the long haul, even in registered accounts.

That said, if one insists on buying just one pure stock today, our in-house analysts have curated high conviction lists of potential multi-baggers, making the investment research process less time consuming, and the wealth building journey more exciting.

The post If I Could Only Buy and Hold a Single Stock, This Would Be It appeared first on The Motley Fool Canada.

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• Want to Build Your Own Pension? Here’s How Canadian Dividend ETFs Can Help
• Is Your TFSA Worth $109,000? Here’s What That Could Earn You Monthly
• 3 Surging Canadian ETFs I’d Add to My TFSA Right Now
• Here’s How I’d Turn a TFSA Into $800 a Month, Tax-Free

Fool contributor Brian Paradza 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.

The capital gains and dividend distributions earned inside a Tax-Free Savings Account (TFSA) grow tax-free, making it an ideal place to hold investments you plan to keep for years. While individual stocks could deliver strong returns, exchange-traded funds (ETFs) offer instant diversification and require less ongoing maintenance.

If I were building a TFSA portfolio to compound for decades, these three Canadian-listed ETFs would be near the top of my buy-and-hold list.

BMO Canadian Dividend ETF

Investors looking for a mix of income and long-term growth may find plenty to like about the BMO Canadian Dividend ETF (TSX: ZDV). The fund is designed to invest in Canadian dividend-paying stocks using a rules-based approach that considers dividend growth, yield, and payout ratios.

What makes ZDV even more attractive for TFSA investors is its focus on established Canadian businesses with proven dividend-paying histories. Many of these companies operate in sectors that generate reliable cash flows, helping support both distributions and long-term capital appreciation.

ZDV holds 65 securities and is heavily weighted toward financial and energy stocks, which together account for more than 60% of its portfolio. Its largest positions include large-caps like Royal Bank of Canada, Toronto-Dominion Bank, Enbridge, Canadian Imperial Bank of Commerce, and Canadian Natural Resources.

BMO Canadian Dividend ETF currently offers monthly distributions with a 2.7% yield and has a management expense ratio (MER) of 0.39%. It has also delivered solid performance, delivering a 41.5% return in just one year as of April 30.

iShares S&P/TSX Canadian Dividend Aristocrats Index ETF

For investors who value consistency, the iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (TSX: CDZ) is also worth considering.

This fund tracks an index of Canadian stocks that have raised their ordinary cash dividends every year for at least five consecutive years. That requirement naturally helps it include only the businesses with stable operations and a shareholder-friendly approach.

CDZ ETF currently holds 96 stocks and offers broad diversification across sectors, with energy representing its largest sector allocation, followed by financials, industrials, utilities, and real estate. Its top holdings include South Bow, TELUS, Gibson Energy, Westshore Terminals Investment, Enbridge, and Canadian Natural Resources.

The ETF distributes income monthly and offers a distribution yield of roughly 3.1%. Interestingly, since its launch in 2006, a $10,000 TFSA investment would have grown to nearly $48,000 by April 2026 with distributions reinvested.

BMO Nasdaq 100 Equity Hedged to CAD Index ETF

While dividend ETFs can provide stability, every long-term TFSA portfolio should also have some exposure to growth stocks. That’s exactly what the BMO Nasdaq 100 Equity Hedged to CAD Index ETF (TSX: ZQQ) offers. As of April 2026, ZQQ ETF generated annualized returns of 25.8% over three years.

ZQQ ETF aims to replicate the performance of the Nasdaq-100 Index while hedging U.S. dollar exposure back to the Canadian dollar. The ETF gives investors access to many of the world’s largest technology and innovation-driven companies without having to buy individual U.S. stocks.

The tech sector accounts for more than 53% of its portfolio, while communication services and consumer discretionary stocks also hold large weightings. Its largest holdings include American giants like Nvidia, Apple, Microsoft, Amazon, Alphabet, Broadcom, Tesla, Meta Platforms, and Walmart.

Unlike the other two ETFs, ZQQ is not built primarily for income. Instead, it offers exposure to companies leading major trends such as artificial intelligence (AI), cloud computing, digital advertising, and e-commerce. For TFSA investors with a long-term approach, that growth potential could be difficult to ignore.

The post 3 Canadian ETFs I’d Tuck Into a TFSA and Never Consider Selling appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has positions in Amazon, Apple, Canadian Natural Resources, Enbridge, Microsoft, Nvidia, Tesla, and Toronto-Dominion Bank. The Motley Fool recommends Alphabet, Amazon, Apple, Broadcom, Canadian Natural Resources, Enbridge, Gibson Energy, Meta Platforms, Microsoft, Nvidia, TELUS, Tesla, Walmart, and Westshore Terminals Investment Corporation. The Motley Fool has a disclosure policy.

Earning a steady stream of monthly paycheques from your investment portfolio is a preferable outcome for passive-income investors. But managing individual dividend-paying stocks, bonds, or preferred shares can quickly become a chore, given varying payment dates, credit risks, and recurring reinvestment decisions. Investing in monthly-dividend exchange traded funds (ETFs) eliminates most of these challenges. They offer you diversified, professionally managed portfolios that deposit cash directly into your account every month.

Two BlackRock iShares ETFs stand out for their reliable monthly payouts and enticing yields of up to 5.2% right now. Both ETFs are designed for long-term buy-and-hold investors, charge rock-bottom fees, and can be held in registered accounts like TFSAs and RRSPs. Let’s dive in.

iShares S&P/TSX Composite High Dividend Index ETF

The iShares S&P/TSX Composite High Dividend Index ETF (TSX: XEI) offers a simple way to own a curated basket of large-cap Canadian dividend stocks that pay the best yields on the TSX. With nearly $4.1 billion in net assets spread across 75 holdings, it’s a heavyweight in the monthly-income ETF space.

The ETF’s dividends yield about 3.6% annually, paid in 12 monthly installments rather than quarterly, so you can count on a regular income stream.

Investors in the XEI have enjoyed market-beating total returns so far this year. The monthly dividend ETF has delivered an impressive 22.8% net asset value gain year-to-date. By comparison, investing in another passively managed ETF, the iShares Core S&P/TSX Capped Composite Index ETF (TSX: XIC), which seeks to own the entire TSX Composite, has generated a 10.7% total return during the same period, while paying quarterly dividends that yield an inferior 2%.

The XIE has a valuation advantage too. Its portfolio carries an average price-to-earnings (P/E) ratio of 17, notably cheaper than the broader Canadian market. By comparison, the XIC trades at a P/E of 20.3.

A minuscule management expense ratio of 0.22% means only $2.20 per $1,000 invested goes to fees each year, leaving more dividends in your pocket.

Distributions have been substantially stable and, in many years, have trended higher. With blue-chip Canadian stocks dominating the portfolio, the XEI ETF provides a solid core holding for anyone seeking monthly dividends without sacrificing the growth potential of Canadian equities.

iShares S&P/TSX Canadian Preferred Share Index ETF

The iShares S&P/TSX Canadian Preferred Share Index ETF (TSX: CPD) is a compelling monthly dividend ETF option for higher monthly yields and an extra layer of diversification. It holds a portfolio of 150 investment-grade Canadian preferred shares, with about $1.1 billion in assets under management, and pays monthly dividends that currently yield around 5.2% annually. It uses no “risky” leverage, and has raised monthly dividends over the past five years.

CPD Dividend data by YCharts

But what are preferred shares? They’re hybrid securities that sit between corporate bonds and common stocks in a company’s capital structure. Preferred shareholders get fixed dividends that are typically paid before any dividends go to common shareholders. Preferreds offer higher yields than most government or corporate bonds, making them a valuable income booster and a capital stabilizer during market turbulence.

The CPD ETF has a rock-solid stock selection methodology. It selects preferred shares with a credit rating of at least P-3 (investment grade), listed on the TSX, and denominated in Canadian dollars to eliminate currency risk. No single issuer exceeds 10% of the portfolio, and managers rebalance the portfolio quarterly to contain company-specific risk.

A management expense ratio (MER) of 0.49% implies investors pay $4.90 per every $1,000 invested annually – reasonable for a niche fixed-income-like product.

Top holdings include preferred-share tranches from TC Energy, Fortis, and several Big Six Canadian banks. By weight, insurance companies lead at 30.3%, followed by energy (21%), utilities (17.5%), and banks (11.9%), with telecom and consumer staples rounding out the mix. This sector diversity helps smooth out dividend payments.

Because preferred shares behave somewhat like long-duration bonds, CPD can complement a portfolio heavy on common stocks or GICs, adding a new dimension of monthly income. The CPD ETF has produced a respectable average annual total return of 6.3% over the past 10 years, with dividends doing the heavy lifting.

The post 2 Monthly-Income ETFs With Yields Reaching as High as 5.2% appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends BlackRock and Fortis. The Motley Fool has a disclosure policy.

Investing in the stock market needs dedicated time and research. Investing without knowledge is a way to lose your hard-earned money. For instance, buying the dip is a strategy, but not every dip is a buy. Similarly, accumulating shares over the years can help you gain from dollar cost averaging, but accumulating shares of a falling company could mean compounding your losses. The idea is not to make you fear investing but to build the right investing attitude. Using the above strategies efficiently can help you build strong returns. ETFs can be a good start, as you don’t need to study every stock in detail or monitor the stock market every year.

Who should invest in ETFs?

ETFs, by design, pool investors’ money and replicate a stock market index. The index has certain rules, but are mostly a list of top-performing stocks that meet the investing criteria. These indices are rebalanced quarterly, where poor-performing stocks replace performing stocks. While the ETFs replicating these indices may not get you the underdogs that can make windfall gains, they can make you invest in well-performing companies that give returns. Even Warren Buffett has a small portion of his portfolio dedicated to ETFs, as they give market returns.

Why buy this ETF like there’s no tomorrow?

Now that you are sure you want to invest in ETFs, which one should you buy? There are market ETFs, but they are worth buying only when the market crashes, as you will benefit from a recovery rally. Earning only market returns won’t make you wealthy. You need an ETF that can beat the market. Consistently, the Nasdaq has housed the world’s most valuable companies. It has all the trillion-dollar market cap companies.

The iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSX: XQQ) replicates the Nasdaq 100 Index. The ETF surged 26% after the March 2026 dip, while the Index surged 26.8%. The index has jumped 135% since January 2023, riding the artificial intelligence (AI) rally. The rally was driven by more than a 1,000% jump in the share price of companies like Nvidia, Broadcom, and Micron Technology.

When you see your $10,000 investment turn into $23,500, you automatically start building interest in stocks. You open the ETF factsheet in your email and see the key stocks driving the index returns. The factsheet states the top 10 holdings. Back in 2023, Nvidia and Micron were not among the ETF’s top five holdings, but today they command a 9.4% and 4% weightage, respectively.

The ETF keeps rebalancing, changing weightage as per the index. The better a stock performs, the more weightage it gets. There is no fund manager bias, but simple market dynamics are moving the tide. Think of it like paragliding. You go with the wind and have control of changing directions and landing through rebalancing.

Why this ETF is a long-term investment that you never sell

The historical performance of this ETF shows that its average annual return was 19% in the last 10 years. That’s a market-beating return. The past performance does not determine future returns. But if you look at the future, most technology stocks are reshaping our lives in many ways.

The upcoming trends of AI at the edge, robotics, self-driving cars, and space travel will be listed on Nasdaq. Nasdaq provides tech companies with a marketplace where investors have the appetite to take risks. That explains why Canadian tech companies like Shopify and Hive Digital Technologies are listed on Nasdaq. An ETF that replicates the performance of such a marketplace is worth holding for decades.

Tech doesn’t always go up. The 2022 tech meltdown even pulled the Nasdaq down. However, the downside was limited to 35%, and there was assurance of a market recovery, which an individual stock cannot provide. This makes the XQQ ETF ideal for both new and veteran, retired and young investors.

The post Why I’m Buying This ETF Like There’s No Tomorrow and Never Selling  appeared first on The Motley Fool Canada.

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Fool contributor Puja Tayal 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.