The artificial intelligence (AI) boom is a wealth-building phenomenon that has created new millionaires since 2022. It’s only rational for Canadian investors to want a piece of this transformative growth today. While the fear of missing out (FOMO) can be a dangerous investment driver, the party is far from over, with billions still pouring into AI infrastructure and innovation accelerating at a breakneck pace.

While the biggest AI companies are domiciled on foreign exchanges, a simple option exists for Canadian investors wondering how to participate without picking individual foreign stocks: Canadian-dollar-denominated AI-focused exchange-traded funds (ETFs). These funds offer a single-ticket approach to gaining diversified exposure to the companies powering the AI revolution. Let’s explore the top Canadian AI ETFs that could help your portfolio catch the next wave of growth.

TD Global Technology Leaders Index ETF: The most established titan

Think of the TD Global Technology Leaders Index ETF (TSX: TEC) as a seasoned veteran in the tech space. While not exclusively an AI fund, its massive $3.5 billion portfolio is packed with the very companies leading the charge. With 234 holdings, it offers broad diversification across global tech giants.

The TEC ETF’s appeal is straightforward: you get access to powerhouse AI players like Nvidia, Microsoft, and Meta Platforms under one roof. This ETF is a compelling choice for investors seeking a proven, low-cost vehicle with a annual management expense ratio (MER) of just 0.39%. A $10,000 investment three years ago, just before ChatGPT’s explosion, would have more than doubled to over $21,000.

CI Global Artificial Intelligence Fund ETF

Investors seeking a more concentrated AI bet may check out the CI Global Artificial Intelligence Fund ETF (TSX: CIAI), Canada’s largest dedicated AI equity ETF with nearly $1 billion in assets. This fund is actively managed, meaning a team of professionals actively researches and selects companies they believe will benefit most from AI advancements. This hands-on approach comes with a somewhat higher but manageable management fee of 0.55%, following the expiry of a fee waiver midyear this year.

With a heavy weighting in U.S. tech stocks of 84% and Nvidia stock as its top holding at 12.5%, the CIAI ETF is designed for investors who want a focused, professionally curated basket of AI leaders and are comfortable with higher capital risk for potentially greater long-term capital appreciation.

Global X Artificial Intelligence Semiconductor Index ETF: The engine room play

If AI is the brain, semiconductors are the heart, and the Global X Artificial Intelligence Semiconductor Index ETF (TSX: CHPS) offers direct access to this critical niche. As Canada’s first semiconductor ETF, CHPS targets companies that design and manufacture the chips powering everything from data centres to AI-smart devices. This is a tactical, high-conviction investment. The fund tracks an index of 18 chip giants including Nvidia, Broadcom, and Taiwan Semiconductor Manufacturing. The ETF is highly concentrated with top 10 holdings comprising over 90% of the portfolio.

With an MER of 0.66%, it’s a bit pricier than some peers, but you’re paying for specialized exposure to the essential hardware behind AI. This TSX AI ETF offers a compelling, targeted opportunity for investors who believe the real gold rush is in selling the picks and shovels.

2 small Canadian AI ETF challengers

Two tiny AI ETFs are competing for investor dollars in 2025, and one of them uses AI to augment stock picking.

Launched in early 2024, the Invesco Morningstar Global Next Gen AI Index ETF (TSX: INAI) takes a disciplined, rules-based approach to identify companies expected to reap significant economic benefits from AI. It’s attractive due to its low MER of 0.38% — the lowest among the top five Canadian AI ETFs listed in the table above. It has 48 holdings and is somewhat diversified with tech stocks contributing a 70.6% portfolio weight while telecoms (16.4%) and consumer discretionary stocks (10%) add sector diversity.

What if an AI helps manage your AI investments? That’s the intriguing premise behind the Evolve Artificial Intelligence Fund (TSX: ARTI). This tiny ETF uses an artificial intelligence platform to augment its stock selection and portfolio management. It’s a meta-play for investors comfortable with the idea that machine learning can identify opportunities humans might miss. It has 60 holdings, 99% of which are U.S. stocks.

The post AI ETFs for Canadian Investors Who Don’t Want to Miss Out 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The Canadian financial sector is a cornerstone of many individual investment portfolios, and exchange-traded funds (ETFs) that bundle Canadian big bank stocks remain incredibly popular. But not all bank ETFs are created equal. Recently, investor money has been flowing into three distinct options, each telling a different story about what shareholders are currently looking for.

Whether you’re a growth-focused investor, a believer in balanced risk, or an income hunter, understanding the differences between the TD Canadian Bank Dividend Index ETF (TSX: TBNK), the BMO Equal Weight Banks Index ETF (TSX: ZEB), and the Hamilton Canadian Financials Yield Maximizer ETF (TSX: HMAX) is key to finding the best fit for your portfolio. Let’s dive into these Canadian bank ETFs to see which might be the top ETF to buy right now for your goals.

TD Canadian Bank Dividend Index ETF: The dividend growth dynamo

Launched in 2023, the TD Canadian Bank Dividend Index ETF is the new kid on the block, but it’s already making waves. Over the past three months, it has pulled in an impressive $138.7 million in new money. Its appeal? A compelling combination of a low-cost structure and a smart, focused strategy. Its Management Expense Ratio (MER), which is the annual fee of the fund company you incur, is a very competitive 0.28%. This low fee means more of the returns end up in your pocket.

The ETF weights its “Big Six” Canadian bank stock holdings based on which banks have grown their dividends the most over the past year. It tilts towards the most aggressive dividend growers. For example, National Bank of Canada and Royal Bank of Canada currently make up more than half the portfolio because of their strong recent dividend increases.

This allocation strategy powered a stunning total return of approximately 56.5% since inception. Investors who prioritize long-term dividend growth over immediate yield may be drawn to the TBNK’s strategy of overweighting the fastest-growing payers, a perfect match.

Currently, the ETF’s monthly dividends yield 3.2% annually.

BMO Equal Weight Banks Index ETF: The steady, balanced giant

As the grandpa of Canadian bank ETFs, the BMO Equal Weight Banks Index ETF has been a reliable investment since 2009. With a massive $4.3 billion in net assets, it’s the most established leader. Its key differentiator is right in its name: equal weight. Instead of betting heavily on one or two of the largest banks, the ZEB ETF spreads its investment evenly across the Big Six, with each holding contributing roughly 16.5% to 16.8% weight. This approach reduces company-specific risk, muting the negative impact of any one bank’s bad year on your wealth.

With an MER that is identical to TBNK at 0.28%, the ZEB is also a champion of low-cost ETF investing. It offers a solid, dependable distribution yield of around 3.3%, paid monthly.

The ETF has experienced a $600 million funds outflow during the past three months. While it might be seeing some capital drift towards newer, more niche ETFs this year, its long track record and balanced methodology remain its core strengths. It remains ideal for investors who want simple, straightforward, and diversified exposure to the Canadian banking sector without having to pick winners or analyze dividend trends.

Hamilton Canadian Financials Yield Maximizer ETF: The high-income powerhouse

Investors whose primary investment goal is generating substantial cash flow today will be drawn to the Hamilton Canadian Financials Yield Maximizer ETF. The HMAX recently exploded onto the scene, amassing nearly $1.7 billion in assets since its 2023 launch and attracting over $163 million in the last three months. The reason for this frenzy is its eye-popping yield, currently sitting at 13.2%. This incredible income is generated by holding a portfolio of major Canadian financials, about 72% in the big banks, and then using a covered call options strategy to enhance the yield.

This yield-enhancing strategy involves selling options on its holdings to collect extra income, which is then passed onto investors as larger monthly dividends. This expertise comes at a higher cost, with an MER of about 0.80% or $8 annually on every $1,000 invested. However, the trade-off can be well worth it for investors seeking maximum income.

The HMAX ETF also offers slightly more diversification by including a few Canadian insurance companies and asset managers like Brookfield Corporation. This ETF is built for the income-focused investor, perhaps someone in or near retirement, who wants to maximize the cash generated from every dollar invested in the financial sector right now.

The post Comparing Canadian Bank ETFs: Best Bang for Your Buck 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 has positions in and recommends Brookfield. The Motley Fool recommends Brookfield Corporation. The Motley Fool has a disclosure policy.

Canadian investors looking to put money to work sometimes wonder how to best tap into the explosive growth of the technology sector. While Canada is a hub for innovation, the TSX is notoriously light on pure-play technology stocks. This is where exchange-traded funds (ETFs) become a powerful horizon-broadening tool. They bundle a collection of stocks, some of them international, into a single ticker you can buy and sell like a stock. After sifting through technology ETFs on the TSX, one fund stands out as my clear favourite for a multi-year growth story: CI Global Artificial Intelligence Fund ETF (TSX: CIAI).

Why CIAI catches the eye of growth investors

Launched just last year, the CI Global Artificial Intelligence Fund ETF has already made a significant splash. It has swiftly gathered about $900 million in net assets, demonstrating strong investor appeal. But what truly makes it a top Canadian growth ETF to buy in September is its laser focus on the single most transformative force in technology today: artificial intelligence (AI).

AI is fundamentally reshaping how businesses and societies operate globally. Getting exposure to the companies leading this charge is a compelling long-term strategy for Canadian investors. CIAI offers a direct ticket to that very opportunity, and its recent performance speaks volumes. As we approach the final quarter of 2025, the ETF has gained an impressive 17% over the past three months and is up a remarkable 36% over the past year.

An actively managed approach to a dynamic theme

Unlike many ETFs that passively track a predefined index, CIAI is actively managed. This means a dedicated team of professionals at CI Global Asset Management is constantly researching and selecting companies they believe are best positioned to benefit from AI. The team’s goal is to maximize long-term capital growth by investing in firms involved in the research, development, and real-world application of AI technologies. This hands-on approach can be a significant advantage in a fast-moving technology field, where today’s leader might be overtaken by a new innovator tomorrow.

By investing in CIAI, you’re essentially buying the expertise of a team with deep research resources to identify the true AI pioneers.

A portfolio packed with global AI leaders

Investors in CIAI buy a concentrated portfolio of predominantly U.S. and international technology giants. The fund manager allocates a whopping 88.8% of the fund to U.S. stocks, giving Canadians easy access to global tech leaders. Pure technology stocks make up 81% of the portfolio. Investors craving exposure to the hottest names in AI will find them here.

Chipmaker Nvidia, a cornerstone of the AI revolution, was the top holding with a 12.5% weighting going into September. While CI Global Asset Management doesn’t reveal the current number of holdings, the top 10 holdings accounted for about 73% of the portfolio recently, selected on a high-conviction strategy focused on what the managers believe are the best AI opportunities.

Low-cost entry for a high-growth potential

A critical factor for any ETF is its cost, known as the management expense ratio (MER). This annual fee covers the fund’s operating expenses and directly impacts your returns. CIAI made headlines at its launch by offering the lowest management fee in its category. While the standard fee is 0.55%, CI implemented a fee waiver, bringing it down to just 0.20% until the fund’s first anniversary or until it hits $1 billion in assets. The MER was 0.39% at the end of 2024, which remained very competitive for an actively managed fund focused on a specialized theme. Perhaps this helped speed up fundraising efforts.

Given that the first anniversary is behind us, the MER should rise in 2025 and beyond if it matches other AI-focused ETFs in the U.S., with average MERs of 0.68%, or $6,80 on every $1,000 invested annually. This reasonable cost approach means more of your money is working for you, not going toward fees.

Investor takeaway

The CI Global Artificial Intelligence Fund ETF is a top investment asset for long-term, growth-oriented investors who understand that high potential returns come with higher risk. It’s a strategic bet on the multi-year expansion of AI that is managed by professionals who are dedicated to navigating this complex technology landscape. CIAI presents a compelling, one-ticket solution to own the companies building an intelligent future to Canadian investors seeking a favourite tech ETF to anchor the growth portion of their portfolios this September and for years ahead.

The post This Is My Favourite Technology ETF for Canadian Investors 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 Nvidia. The Motley Fool has a disclosure policy.

Get-rich-quick schemes could be the quickest route to financial doom, but the simple path to building wealth is often boring, steady, and yet incredibly powerful. One of the most powerful wealth-building tools available requires almost no effort, minimal cost, and zero stock-picking skill. Consistently investing $250 a month in a diversified low-cost exchange-traded fund (ETF) tracking a well-established market index, like the S&P 500, could turn a Canadian investor into a millionaire.

Canadians may love the S&P 500 Index’s exposure to a larger market, diversification across 500 large-cap U.S. stocks (Canada’s S&P/TSX Composite Index has 200), and deep exposure to the technology sector, a hot source of growth.

After running the numbers on a strategy almost any Canadian can start – investing $250 a month into an S&P 500 Index tracking ETF like the BMO S&P 500 Index ETF (TSX: ZSP) – the results, backed by historical data, might just shock you.

The BMO S&P 500 Index ETF

Why the BMO S&P 500 Index ETF? Since 2012, this ETF has been a heavyweight champion for Canadian investors seeking exposure to the S&P 500 Index. With nearly $20 billion in net assets, one purchase gives you a slice of 500 of the largest and most important companies in the United States, including Nvidia, Apple, Microsoft, and Amazon.com.

The best part? The ZSP ETF does this for a razor-thin management expense ratio (MER) of just 0.09%. That’s only 90 cents a year for every $1,000 you invest! This low cost keeps more of your money working for you.

An incredible past performance

Suppose you had started this disciplined long-term investment plan a decade ago, regularly investing $250 at the beginning of every single month into the ZSP, and reinvesting every dividend.

How much would that investment have grown over time?

The data is quite interesting. Despite various market ups and downs, including during a 2020 market downturn when the COVID-19 pandemic hit North America, the S&P 500 ETF has delivered strong returns over the long run.

An investor who started in August 2015 and contributed $250 at the beginning of every single month into the BMO S&P 500 Index ETF would have invested a total of $30,000 over the past decade (120 months). Thanks to dividend reinvesting, the power of compounding, and the fund’s robust 13.9% 10-year annualized return (roughly 1.2% a month), that investment would be worth approximately $64,378 today.

That’s right. A $30,000 investment potentially grew by over $34,000 in 10 years. This simplified backtest shows the results of a disciplined strategy using a popular Canadian ETF. It perfectly illustrates how steady contributions can transform modest savings into significant capital, proving the incredible power of dollar-cost averaging and compound growth.

The magic ingredient: Time and compounding

The past decade shows us what’s possible. But what about the future? While past performance doesn’t guarantee future returns, it allows us to make educated projections. Let’s use a more conservative average annual return of 9% to see what the next 20 or 30 years could hold for a disciplined investor.

By consistently investing $90,000 of your own money over 30 years, reinvesting all dividends received, you could potentially grow your portfolio to nearly half a million dollars. The gain is purely the result of compound growth doing the heavy lifting for you.

The two most important words: Consistency and patience

The numbers can be dazzling, but the strategy only works if you diligently commit to it and resist the urge to time the market. It’s about your time in the stock market.

You will see market crashes and scary headlines. The key is to keep contributing. Every $250 investment you make during a downturn is buying those world-class companies at a discount, supercharging your returns when the market eventually recovers.

The Foolish bottom line

Building significant wealth doesn’t require a large lump sum. It requires a simple, disciplined plan and the patience to let mathematics work in your favour, as the history of the BMO S&P 500 Index ETF has shown.

A $250 monthly investment into a low-cost S&P 500 ETF like the ZSP is a strategy within reach for many Canadians. This “set it and forget it” approach, over decades, can turn your disciplined savings into a life-changing nest egg.

The post Here’s How Much a $250 Monthly Investment in an S&P 500 ETF Could Grow Over the Long Term 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 Amazon, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

Despite a shaky start to the year, the TSX Composite Index continues to make new all-time highs in 2025. Cooling inflationary pressures and better-than-expected economic growth prospects are giving investors plenty to cheer about.

With the economy holding steady and confidence creeping back, now might be the time to look at broad-based opportunities rather than betting heavily on one or two names. Exchange-traded funds (ETFs) make that possible by packaging top Canadian stocks into a single investment you can buy with a click. You get diversification, reduced single-stock risk, and exposure to entire sectors moving in the right direction. Let’s take a closer look at three top Canadian ETFs that offer a smart way to invest in this TSX rally.

BMO Equal Weight Banks Index ETF

If you want a straightforward way to invest in the Canadian banking sector, BMO Equal Weight Banks Index ETF (TSX: ZEB) delivers exactly that. It focuses entirely on Canada’s largest banks, holding National Bank, Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia, and Bank of Montréal in equal proportions.

As of June 30, 2025, ZEB ETF traded with net assets of nearly $4 billion and offered a 3.8% annualized distribution yield. In the 12 months ended in June 2025, it delivered a 37% return, benefiting from falling interest rates and a rebound in loan growth.

The strong performance was fueled by robust earnings across the sector, improving credit quality, and better-than-expected economic data. Each bank has been supported by higher fee-based revenue and stable mortgage demand.

Overall, the Canadian banking sector’s long history of stability, combined with continued dividend growth and expansion into wealth management and digital banking, makes ZEB a solid ETF pick for seeking stable returns while riding the TSX’s bullish momentum.

iShares S&P/TSX Capped Information Technology Index ETF

From traditional finance, let’s move to Canada’s fast-growing technology stocks. iShares S&P/TSX Capped Information Technology Index ETF (TSX: XIT) mirrors the performance of Canada’s top tech companies, including Shopify, Constellation Software, CGI, and Celestica.

At the end of June 2025, this ETF managed $590 million in assets and posted a massive 37.8% return over the past year.

The ETF’s surge was mainly powered by strong earnings from its top holdings. Shopify continued its growth in e-commerce solutions, Constellation Software expanded through acquisitions, and Celestica benefited from rising demand in electronics manufacturing. These trends pushed the fund’s price-to-earnings ratio to around 43, reflecting the market’s high-growth expectations.

With Canada’s tech sector expanding into artificial intelligence, cloud solutions, and advanced manufacturing, XIT ETF offers a targeted way to tap into long-term innovation trends while keeping diversification within the sector.

iShares S&P/TSX 60 Index ETF

My last ETF pick offers instant exposure to Canada’s top large-cap stocks. iShares S&P/TSX 60 Index ETF (TSX: XIU) is the country’s largest and most liquid ETF, with $16.9 billion in assets as of June 30. It currently holds 61 companies, including RBC, TD, Enbridge, Shopify, and Canadian Pacific Kansas City. The ETF returned 26% in the 12 months ended in June 2025 and currently offers a 2.7% distribution yield.

Its recent performance is mainly supported by strength in the banking, energy, and technology sectors. Its reliable quarterly distributions make it even more attractive for income-focused investors, while the diversified holdings reduce the risk of sector-specific downturns.

For investors wanting one core holding to anchor their portfolio during the TSX’s record-breaking run, XIU remains a dependable choice among the top Canadian ETFs to buy in 2025.

The post The TSX Is Soaring: 3 No-Brainer ETFs to Buy Right Now appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has positions in Bank Of Montreal, Celestica, Enbridge, Shopify, and Toronto-Dominion Bank. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Bank Of Nova Scotia, CGI, Canadian Pacific Kansas City, Constellation Software, and Enbridge. The Motley Fool has a disclosure policy.

The Canada-U.S. trade negotiations are resuming this week after Canadian Prime Minister Carney rescinded a contentious 3% Digital Services Tax (DST) that was due to take effect today (June 30, 2025). The Canadian economic landscape is a fascinating place for investors right now. With inflation stabilizing and interest rates likely falling further towards 2.25% by year-end, many Canadian investors could be wondering how to make their money work harder without taking on undue risk. The good news is, even with $5,000, you can embark on a journey that blends “safety” with robust “growth investing” potential. With such a modest sum, the smartest play for effective diversification could be to start with Exchange Traded Funds (ETFs).

Navigating 2025: Safely investing for growth

The Bank of Canada has been carefully steering the economy, with interest rate decisions affecting everything from borrowing costs to investment returns. While inflation has mostly subsided, the risk of previous price increases reminds us that simply holding cash can diminish your purchasing power over time. This post-inflation, tariff-influenced environment highlights the importance of safely investing for growth, whereby your capital is protected while still allowing for potential market gains.

The power of ETFs for safety and growth investing

ETFs are baskets of various investments, including stocks and bonds, that trade on exchanges like regular stocks. They are game-changers for individual investors. With a single purchase, you gain instant diversification, significantly reducing the risk of any one company or sector impacting your entire portfolio.

With $5,000 to invest, you could focus on all-in-one ETFs and specialized ETFs that offer broad market exposure.

The Vanguard All-Equity ETF Portfolio (VEQT): A multi-asset growth cornerstone

Investors who intend to build a truly diversified, growth-oriented portfolio with simplicity may find the Vanguard All-Equity ETF Portfolio (TSX: VEQT) a standout. With more than $7.1 billion in net assets, this single ETF provides access to returns on 13,341 stocks from around the globe, including Canada (30.7% of the portfolio), the U.S. (44.5% of the portfolio), other developed international markets, and even emerging markets. Think of it as owning a tiny piece of the world’s most innovative and successful companies, all wrapped up in one convenient package.

The VEQT is designed for long-term growth and has no bond component, making it suitable for investors with a relatively high risk tolerance and a long-term horizon. Its low management expense ratio (MER) of 0.24% (or $2.40 per annum on every $1,000 invested) ensures more of your returns stay in your pocket, maximizing the power of long-term compounding.

Since its inception in 2019, the ETF has grown a $10,000 investment to more than $20,000. For many, VEQT could be the primary engine for growth investing.

Beyond VEQT, consider complementing your portfolio with a Canadian bond ETF.

The BMO Aggregate Bond ETF (ZAG)

While interest rates have been uncharacteristically volatile over the past decade, bond ETFs generally provide a critical element of safety by stabilizing portfolio returns, especially during periods of stock market corrections. Funds like the BMO Aggregate Bond Index ETF (TSX: ZAG) invest in a diversified mix of Canadian government and corporate bonds, offering a steady income stream and a dampening effect on overall portfolio volatility.

The ZAG boasts an $11.2 billion portfolio of low-risk bonds, including provincial and high-quality corporate bonds. The bond portfolio pays monthly distributions that may yield 3.5% annually, a source of consistent income.

Most noteworthy, the low-cost ETF has a management expense ratio of 0.09%. Investors may incur as little as $0.90 in annual expenses per $1,000 invested.

How to invest $5,000 for safety and growth

To invest $5,000 for both capital safety and potential growth, individual investors may allocate portions of the portfolio into the widely diversified all-equity ETF (say $3,000) and the remainder in an investment-grade bond ETF ($2,000) to make a 60|40 asset allocation (60% equity, 40% bonds) that strives for equity-led growth while banking on bonds to minimize the impact of potential capital losses. Investors may adjust allocations across these ETFs depending on personal objectives and the individual’s capacity to absorb and contain risks during the investment period.

The ETFs (and others like them) may form one’s core portfolio. With the base covered, any subsequent small capital additions could be invested in high-conviction growth stock ideas to magnify growth potential.

The post How to Invest $5,000 for Both Safety and Growth Potential 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

While December holidays feel distant, the Tax-Free Savings Account (TFSA) contribution window for 2025 is quietly shrinking. That $7,000 sitting in your chequing account? Waiting until January to deploy it isn’t just procrastination, it’s forfeiting six extra months of tax-free compounding. Think of it as planting a money tree today versus next spring. Which orchard grows faster?

With the 2025 TFSA limit at $7,000, your contribution is the full shot. The smart move isn’t scrambling on December 30th – it’s strategically planting that capital now. Here’s how to make every dollar work harder, tax-free.

Strategy may trump stock picking (Diversify your $7K!)

Forget gambling on one “hot stock.” A $7,000 investment is perfect for building a mini-portfolio with built-in resilience and growth potential.

Firstly, lay a foundation for your TFSA. Create a core holding. Start with a low-cost Exchange Traded Fund (ETF) as your set-it-and-forget-it workhorse. These broad-based funds offer instant diversification while capturing broad market growth. Ideal for long-term TFSA wealth building could be the iShares S&P/TSX 60 Index ETF (TSX: XIU), which provides instant access to 60 of Canada’s largest companies with established moats, lower business risks, well-established markets, and proven capacity to generate free cash flow (the lifeblood of any business venture). With more than $17 billion in assets under management, the ETF provides instant diversification across all Canadian economic sectors for a low management fee. Given a management expense ratio (MER) of 0.18%, investors may incur about $1.80 in expenses for every $1,000 invested. The ETF’s dividend yield of 2.7% could more than cover annual expenses.

The XIU ETF could be a core holding for steady long-term growth in a TFSA. Allocate about $4,000 into this core holding.

Alternative ETFs to buy could include the Vanguard S&P 500 Index ETF, which could offer exposure to the U.S. market, another engine for growth.

Secondly, add growth accelerators to your TFSA. Here’s where your stock-picking prowess comes in. Allocate about $2,000 to your high-conviction stocks with serious long-term growth potential. Think innovation leaders and resilient giants like Canada’s e-commerce crown jewel, Shopify (TSX: SHOP). The TSX tech giant has entered a strong earnings growth phase that could take its stock to new all-time highs. The $190 billion Canadian technology stock is far from done; it’s leveraging artificial intelligence (AI) while focused on a global expansion strategy. And there could be many more growth stocks like it. Joining investment forums and professionally managed stock picking services could unlock a number of them.

And lastly, your wild card.

Pick your investment wild card for $1,000

Portfolio flexibility is power. The remaining $1,000 could be deployed according to your risk tolerance.

If you feel you can stomach high volatility and you have ample time to patiently wait for your high-risk bets to gain momentum and shoot to the moon, the TFSA could be the best place for speculative bets with wild growth prospects. Why? If your high-risk bets produce 300%, 1,000% or even 5,000% or more gains on capital, the wealth is all yours to keep and enjoy. The Canada Revenue Agency (CRA) won’t deserve a cut.

For more conservative investors who may desire a good layer of stability and reliable passive income, high-yield dividend ETFs, or Canadian real estate investment trusts (REITs) could be a good place to park your $1,000 TFSA balance. REITs would do well in a TFSA because they usually pay monthly distributions that may be taxed as ordinary income (unless stashed in a TFSA).

You could choose to hold onto the $1,000 as cash within the TFSA, ready to pounce on future market dips.

Why this investment approach works in your TFSA

This strategy supercharges the TFSA’s core superpower for 100% tax-free compounding. Your ETFs’ distributions (dividends, interest, capital gains) will grow untouched by the CRA. Growth stocks (like SHOP or Nvidia) add massive potential for long-term gains. Most noteworthy, wild card stocks uncovered through your extensive research or from investment forum memberships may generate incredible wealth gains that attract zero tax on capital gains.

Remember, investment gains within your TFSA don’t reduce your future contribution room. Do not let TFSA capital sit idle till year-end; take advantage of the time and let the final six months of 2025 work for you.

Happy investing, Fools.

The post The Smart Way to Invest $7,000 in Your TFSA Before Year-End 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 has positions in and recommends Shopify. The Motley Fool recommends Nvidia. The Motley Fool has a disclosure policy.

Got $5,000 and a desire to make your money work harder? You could potentially grow this capital into a substantial amount over time. Many Canadians wonder how to invest for growth, especially with a modest starting sum. However, once you commit to an investment journey, you can build lasting wealth from modest initial capital positions. This isn’t about getting rich quick, but rather laying a solid foundation for potential growth over the next five years and beyond.

Why $5,000 is a great starting point

Don’t underestimate the power of $5,000. Even seemingly small amounts can grow significantly over time thanks to the magic of compounding. Starting with $5,000 allows you to begin building good investing habits, understand market dynamics, and put your capital to work. With accessible online platforms, investing this sum has never been easier for Canadians in 2025, making it a fantastic initial step on your wealth-building journey.

How to invest $5,000 for steady growth

When thinking about how to invest for growth in Canada, especially with a five-year horizon (or longer!), diversification is as absolutely crucial as choosing the best investments to stash your capital in. You want to hold the best-in-class growth investments, and you don’t want to put all your eggs in one basket.

For a starting portfolio of $5,000, achieving broad diversification can seem challenging, but there’s a powerful tool perfect for this: Exchange Traded Funds (ETFs).

Buy the iShares S&P/TSX 60 Index ETF

The iShares S&P/TSX 60 Index ETF (TSX: XIU) looks appealing for growth-oriented investors. This exchange-traded fund (ETF) allows you to acquire shares in 60 of Canada’s largest and most liquid companies in a single transaction. This provides instant diversification across major Canadian industries, with sector weights designed to mimic the S&P/TSX Composite Index, Canada’s leading measure of stock market performance. Top sectors include financials (36.4%), energy (16.6%), and materials (11.5%).

Investing in the XIU means you’re investing in companies with well-established moats, leading market shares, and substantial revenue books, often employing some of Canada’s best talent.

The ETF offers a low-cost investment strategy with a management expense ratio (MER) of just 0.18%, meaning investors may incur $1.80 annually in management expenses on every $1,000 investment.

The fund has accumulated over $16.7 billion in assets under management since its inception in 1999 and delivered a net asset value (NAV) total return of 50% over the past three years. The XIU ETF also provides quarterly dividend distributions, currently yielding 2.7% annually. This ETF is a favorite among both individual and institutional Canadian investors, who added $2 billion in net funds flow to the fund’s portfolio in the past year alone.

The investment fund is an excellent core holding for your $5,000, providing a robust and diversified base around which you can consider adding high-conviction single-stock holdings over time, amplifying your wealth’s growth potential.

Invest wisely: Maximize tax efficiency with TFSAs and RRSPs

As a Canadian investor focused on growth investing in Canada, maximizing tax efficiency is paramount. For your $5,000, your first stop should almost certainly be a Tax-Free Savings Account (TFSA). Any investment growth and withdrawals within a TFSA are completely tax-free, making it an incredibly powerful tool for medium to long-term growth. If your primary goal is retirement savings, an RRSP (Registered Retirement Savings Plan) offers immediate tax deductions on contributions and tax-deferred growth until withdrawal, though withdrawals in retirement are taxed.

Foolish bottom line

Investing $5,000 is a fantastic step towards securing your financial future. By starting with a diversified, low-cost ETF like the iShares S&P/TSX 60 Index ETF in a tax-advantaged account, you’re building a strong foundation for potential growth over the next five years. Remember, patience is key in investing. While the XIU ETF provides solid Canadian market exposure, consider continuing your research to identify high-growth single-stock ideas that could potentially supercharge your portfolio over time. Joining investing forums or premium investment groups can be a great way to stay focused, energized, and discover those high-conviction opportunities that may amplify your portfolio’s growth momentum.

The post How to Invest $5,000 for Potential Growth Over the Next 5 Years 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

For income-focused investors, the appeal of monthly dividend ETFs (exchange-traded funds) lies in their consistency, as they tend to provide smoother cash flow, diversified exposure, and a more predictable income stream than many individual stocks.

And if I had to pick just one to buy and hold for the next 10, 20, or 30 years, I’d want an ETF that has quality holdings, low management fees and offers resilience through economic cycles. In this article, I’ll talk about a top monthly dividend ETF that rises above the rest and tell you why I’d feel confident holding it in my income portfolio for the long term.

A top monthly dividend ETF to buy now

That brings us to BMO Canadian Dividend ETF (TSX: ZDV), a fund that feels like a steady hand in a shaky market.

Now, if you’re thinking about dependable monthly income without having to constantly monitor your portfolio, this ETF is worth a serious look. Paying out every month and yielding just over 3.6% annually, it offers a straightforward way to generate steady income. It does that by investing in a diversified group of dividend-paying Canadian companies that have shown resilience over time.

The fund’s net assets sit above $1.1 billion as of May 2025, which is a solid figure that shows investor confidence in its strategy.

Over the last year, it’s up nearly 12%, and over five years, it has delivered a 73% return — strong returns for a fund that’s primarily focused on income.

A sector mix that keeps things balanced

And here’s where things get even better. The BMO Canadian Dividend ETF leans heavily into financials and energy — two top sectors that tend to offer strong dividend support. Together, they make up more than half of its portfolio.

Add to that utilities, industrials, and communication services, and you’ve got exposure across several solid pillars of the Canadian economy. That variety helps reduce risk while still aiming for reliable returns.

What also makes ZDV a top monthly dividend ETF is its structure. It uses a rules-based approach to select stocks not just based on yield but also on three-year dividend growth and payout ratios. That means it isn’t just chasing high-yielders. It’s focusing on companies that have a habit of growing their payouts while keeping them sustainable.

Reasonable costs and strong performance

So, how much does it cost to hold something like this in your portfolio? Well, ZDV ETF’s management expense ratio is just 0.39%. Considering it’s actively rebalanced and professionally managed, that’s a fair tradeoff for the oversight you’re getting. Investors can also breathe easier knowing there are no trailing commissions to chip away at returns.

And if you’re curious how this ETF has done in the long run, the track record is pretty convincing. Over the past 10 years, it’s posted a 7% annualized return.

Overall, ZDV has everything that a top monthly dividend ETF should, as it offers a mix of quality, consistency, and low fuss. If you’re building an income portfolio to last, this one checks a lot of boxes without making it complicated.

The post If I Could Only Buy and Hold a Single Monthly Dividend ETF, This Would Be it appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar 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.

May is here, and with it comes Canadians’ chance to turbocharge Tax-Free Savings Accounts (TFSAs) with this year’s $7,000 contribution limit. Imagine turning that chunk of cash into a passive income powerhouse, or even doubling it, while you sleep. This may sound too good to be true, but not when you harness the power of dividend exchange-traded funds (ETFs).

These low-cost, professionally managed baskets of stocks let you tap into decades of dividend growth and market resilience without lifting a finger. Whether you’re building a retirement nest egg or craving monthly tax-free cash flow, we’ve got two Canadian ETFs that deserve a spot in your TFSA this May. Let’s dive in!

iShares S&P/TSX Canadian Dividend Aristocrats Index ETF

Since its inception in 2006, the iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (TSX: CDZ) has offered TFSA investors low-cost access to a curated portfolio of large, well-established Canadian companies that have successfully raised their common share dividends every year for the past five consecutive years.

With this BlackRock-managed ETF, TFSA investors could generate growth through equity investing, earn generous tax-free dividends from the ETF’s portfolio of Canada’s most prestigious dividend-paying stocks with a track record of increasing dividends. The ETF pays monthly dividend cheques that currently yield 4.3% annually.

While a 19.3% total return during the past year appears an outlier, the ETF has generated a respectable 7% compound annual return during the past decade. Past performance isn’t predictive of future returns; however, the ETF’s strategy has demonstrated its capacity to grow retirement assets and generate passive income every month.

The ETF’s portfolio has more than $920 million in net assets invested across 90 diversified holdings. Financial sector stocks dominate the fund with a sector weight of 23%, followed closely by energy (14.7%), real estate (12.5%), communication (11.9%), and utilities (10.6%), with many other sectors represented as well.

Most noteworthy, TFSA investors will incur low management costs given a management expense ratio (MER) of 0.66%, or just $6.60 per $1,000 invested. Investors have an option to fully reinvest all dividends into additional ETF units through a dividend reinvestment plan (DRIP), smoothing the tax-free wealth-compounding process.

Vanguard FTSE Canadian High Dividend Yield Index ETF

The Vanguard group has a nicely packaged competing offering to the BlackRock dividend ETFs in the Vanguard FTSE Canadian High Dividend Yield ETF (TSX: VDY), a much larger dividend income-producing fund with more than $3.5 billion in total assets invested across 63 holdings. The Vanguard ETF targets holding positions in Canadian companies characterized by high dividend yield, and it’s attracting significant interest from Canadian investors, receiving an additional $255 million in new net investments year-to-date.

Incepted in November 2012, the Vanguard FTSE Canadian High Dividend Yield ETF continues to pay monthly dividends more than a decade on. The current payouts for May yield approximately 4.4% annually, while dividends over the past 12 months yielded 4.1%.

It’s a passively managed index ETF that tracks the FTSE Canada High Dividend Yield Index, and investors pay remarkably low management fees. With a MER of 0.22%, TFSA investors may incur about $2.20 in total management fees per $1,000 invested, annually.

Past performance has been very good. A $10,000 investment in the VDY ETF five years ago could have grown to more than $21,000 today, with dividend reinvestment. The ETF could have doubled investors’ money during the past five years

Financials dominate the ETF with a 52.5% weight in the portfolio, followed by energy stocks with a 29.4% weight.

Investor takeaway

Canadian ETFs can effortlessly diversify your $7,000 TFSA contribution, grow your retirement nest egg while you sleep, and pay you juicy monthly dividends that may help pay the bills. That said, some individual stocks with very high growth potential could richly reward long-term oriented investors and grow TFSA balances faster. Be on a constant lookout for those. Stay hungry.

The post Investing $7,000 in Your TFSA? Consider These 2 Canadian ETFs for Retirement 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.