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A guide to the best Canadian ETFs for 2022

As the market continues to take investors on a wild ride, Canadians need to remain disciplined and focused on their goals

By Amy Legate-Wolfe, Moneywise

Exchange-Traded Funds (ETF) are a favourite way for Canadian investors to gain access to the market. Since becoming available in 2011, Canadians have been able to build low-cost portfolios with diversification in both assets and countries.

Yet with hundreds of options available, it can be challenging to decide which ETFs to purchase. Especially now, when Canadians continue to trade in a volatile marketplace.

We’ve compiled a list of the best ETFs Canadians can buy today, based on opinions from finance experts. If you make a move, make sure to use a trading platform with low fees.

Here we go over a list of ETFs designed for Canadians in different stages of life, whether you’re brand new to the workforce or entering retirement.

Vanguard Balanced ETF Portfolio (VBAL)

The Vanguard Balanced ETF is one of the best options for those seeking a long-term hold that want help during market uncertainty. The portfolio consists of a balanced ratio of 60 per cent equities and 40 per cent bonds.

The moderate risk profile attracts Canadians to the portfolio, said Sal D’Angelo, Head of Product for Vanguard Americas.

“The mix between stocks and bonds drives 90 per cent of the variability of a portfolio,” D’Angelo said. “That’s going to drive your experience. That’s going to determine your success.”

Vanguard Growth ETF Portfolio (VGRO)

The name should give investors a clue about what they’re getting from the Vanguard Growth ETF. This ETF has more equity exposure, with 80 per cent stocks and 20 per cent bonds.

It comes with more risk, but it provides more long-term growth exposure, D’Angelo said.

Vanguard Retirement Income ETF Portfolio

For those already in or reaching retirement, the Vanguard Retirement Income ETF might be an excellent option.

This ETF is tailored for Canadians seeking income. While it mainly invests in Canada, it also has global exposure. And that’s particularly important during an economic downturn.

“There are so many factors investors can’t control,” said D’Angelo. “The best strategies are focusing on the factors you can control.”

BMO Low Volatility Canadian Equity ETF

Low volatility is natural to look for during a volatile market. And that’s why another top — and particularly timely — recommendation is the BMO Low Volatility Canadian Equity ETF.

Here you get access to the Canadian blue-chip companies with relatively stable performance.

“In the equity markets there’s not a lot of places to hide,” said Erin Allen, Vice-President of Online ETF Distribution for BMO Global Asset Management. “But if you take a lower volatility approach to investing, you’re going to mitigate that volatility and have a better experience as an investor.”

BMO Global Infrastructure Index ETF

Infrastructure is a strong option for those wanting stability but also growth right now. This is an alternative asset class where infrastructure basically keeps the economy running, Allen said.

What’s more, you can invest in it around the world, providing investors with global diversification.

“It’s fundamental to keep our economy running. Bridges, tunnels, sewers, all of which have longer-term contracts,” Allen said. “So again, another defensive play.”

BMO Canadian Dividend ETF

Now is a time when many Canadians want income that can supplement the losses while they wait for the market to recover. And that’s why the BMO Canadian Dividend ETF can be such a strong choice. You’ll continue to see that money coming in at a yield currently of 4.15 per cent at the time of writing. So you’re now getting paid to wait.

“You’re seeing money coming in even if those underlying stocks aren’t growing as expected,” said Allen.

TD Global Healthcare Leaders Index ETF

One area that’s proven to be a strong performer over the last few years has been the healthcare industry. And of course, it’s clear why. Investors are now aware of some of the largest healthcare institutions and are investing in them. But given their essential service, they’ve proven somewhat recession-proof, said Jonathan Needham, Vice President & Director of ETF Distribution at TD Asset Management.

“Healthcare has been the second-best performing sector after technology,” he said.

TD Select Short Term Corp Bond Ladder ETF

Right now, bonds aren’t doing well. But this does make it a great time to buy up bonds for long-term income. You can look into TCSB using a low-cost trading platform today.

And with the shorter duration bond strategy actively managed, you can buy corporate bonds that are down 14 per cent to 15 per cent and lock in yields of 6 per cent and 8 , Needham said.

TD Q International Low Volatility ETF

Having an international low volatility ETF can be incredibly beneficial during turbulent times.

“It’s the children’s rollercoaster ride rather than the adult ones my daughter likes to go on,” said Neeham. “Much less turning of the stomach.”

TD Active Global Enhanced Dividend ETF

Same as before, it’s also a great idea to get into a global dividend payer. For the same reasons as before, but now you have access to international companies and their strong dividend payments rather than just Canada.

“A lot of Canadians are trying to solve the problem that they want income, but not giving up growth,” Neeham said. “This is running in an active way to ensure dividends are still paid.”

Final Thoughts

Now is not the time to panic. It’s not the time to sell everything and have to eat up that loss.

Instead, talk to your financial advisor about your goals, and whether these ETFs could fit within them.

“Do your due diligence and make sure you’re understanding the exposure that you’re investing in,” said Allen. “There’s a lot of information for investors to go through so they can build that underlying portfolio that meets their expectations.”

Some of the nation’s top investing platforms have excellent research tools available and low trading fees, so you can make sure you’re making the right play.

This article was created by Wise Publishing. Wise is devoted to providing information that helps readers navigate the complex landscape of personal finance. Wise only partners with brands it trusts and believes may be helpful to the reader. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Source: Financial Post