Invest in the Top Canadian Stocks With This ETF

Invest in the Top Canadian Stocks With This ETF

Want an easy way to invest in not just dozens but hundreds of Canadian stocks? One exchange-traded fund (ETF) you’ll want to consider is the BMO S&P/TSX Capped Composite Index ETF (TSX:ZCN), which gives you exposure to more than 200 of the best Canadian stocks you can own.

It has a small expense ratio of 0.06%, which will ensure that fees won’t take a big chunk out of your overall returns. And the fund focuses on sectors which shouldn’t be very volatile. Financial stocks account for one-third of the ETF’s holdings, followed by energy stocks (16%) and materials and industrials each make up around 13%. Tech, which is often the most volatile sector, represents a little less than 10% of the ETF’s portfolio.

Among the top holdings are big-name Canadian stocks such as Royal Bank of Canada (TSX:RY)(NYSE:RY), Shopify (TSX:SHOP)(NASDAQ:SHOP), and Toronto-Dominion Bank (TSX:TD)(NYSE:TD).

The ETF provides you with a decent yield as well, of around 2.7%. So in addition to having a broad portfolio, you’ll also get some great recurring income from hanging onto this investment. This year, the ETF has risen by 5% (which isn’t including dividends) and over a five-year period it’s up more than 70%.

While there is plenty of economic uncertainty ahead in the short term, this can make for a good long-term investment to hold in your portfolio for years to come. By having some excellent exposure to Canada’s top companies, you’ll benefit from the country’s long-term growth. And if you have a tax-free savings account, this can be a suitable investment to build your portfolio around.