How do I buy index funds in Canada?

Open a brokerage account (Wealthsimple, Questrade, or a bank broker), fund it, and buy index ETFs like XEQT, VEQT, or VFV. Most Canadians buy index funds as ETFs (exchange-traded funds) rather than traditional mutual fund versions, because ETF fees are much lower — typically 0.05-0.25% vs 1-2% for mutual funds.

What is the best index fund in Canada?

The most popular all-in-one index ETFs are XEQT (iShares, 100% equity, global diversification) and VEQT (Vanguard, 100% equity, global diversification) for growth investors. For balanced investors, VBAL or XBAL (60/40 stocks/bonds) are excellent. VFV tracks the S&P 500 specifically.

Can you buy index funds on Wealthsimple?

Yes. Wealthsimple offers commission-free purchases of all index ETFs listed on Canadian and US exchanges. You can buy any index ETF including XEQT, VEQT, VFV, and hundreds of others with $0 trading fees.

How to Buy Index Funds in Canada 2026 | Step-by-Step

What Are Index Funds?

An index fund tracks a market index (like the S&P 500 or the total stock market) and gives you broad diversification in a single purchase.

Feature	Index Fund (ETF)	Actively Managed Mutual Fund
Management	Passive (follows an index)	Active (fund manager picks stocks)
MER (fees)	0.05–0.25%	1.0–2.5%
Performance	Matches the index	Usually underperforms the index long-term
Minimum investment	$1 (fractional shares on Wealthsimple)	$500–$5,000
Trading	Buy/sell like stocks during market hours	Priced once per day at close
Tax efficiency	Generally higher	Generally lower

Best Index Funds (ETFs) in Canada

All-in-One Index ETFs (Single Fund Portfolios)

ETF	Provider	Allocation	MER	Holdings	Best For
XEQT	iShares (BlackRock)	100% stocks (global)	0.20%	~9,000 stocks	Growth investors (long horizon)
VEQT	Vanguard	100% stocks (global)	0.24%	~13,000 stocks	Growth investors (long horizon)
XGRO	iShares	80% stocks / 20% bonds	0.20%	Stocks + bonds	Moderate-aggressive
VGRO	Vanguard	80% stocks / 20% bonds	0.24%	Stocks + bonds	Moderate-aggressive
XBAL	iShares	60% stocks / 40% bonds	0.20%	Stocks + bonds	Balanced
VBAL	Vanguard	60% stocks / 40% bonds	0.24%	Stocks + bonds	Balanced
VCNS	Vanguard	40% stocks / 60% bonds	0.24%	Stocks + bonds	Conservative
XINC	iShares	20% stocks / 80% bonds	0.20%	Stocks + bonds	Very conservative

Specific Market Index ETFs

ETF	Index Tracked	MER	Best For
VFV	S&P 500 (USD hedged)	0.09%	US large-cap exposure
XUS	S&P 500 (CAD)	0.10%	US large-cap exposure
XIC	S&P/TSX Composite	0.06%	Canadian stock market
VCN	FTSE Canada All Cap	0.05%	Canadian stock market
XEF	MSCI EAFE	0.22%	International developed markets
VIU	FTSE Dev ex NA	0.22%	International developed markets
XEC	MSCI Emerging Markets	0.25%	Emerging markets
ZAG	Bloomberg Canada Aggregate Bond	0.09%	Canadian bonds

How to Buy Index Funds: Step-by-Step

Step 1: Choose a Brokerage

Brokerage	ETF Buy Commission	Best For
Wealthsimple	$0	Beginners, simple investing
Questrade	$0 (ETF buys)	ETF investors wanting more tools
Interactive Brokers	$0.01/share	Advanced investors
TD Direct	$9.99/trade	TD bank clients
BMO InvestorLine	$9.95/trade	BMO bank clients

Step 2: Open an Account

Account Type	Best For	Tax Treatment
TFSA	Most Canadians (especially under $70K income)	Gains are tax-free, withdrawals are tax-free
RRSP	Higher income earners ($70K+)	Tax-deductible contributions, taxed on withdrawal
FHSA	First-time home buyers	Tax-deductible contributions, tax-free withdrawal for home purchase
RESP	Saving for child’s education	20% government grant (CESG) on contributions
Non-registered	After maxing registered accounts	Capital gains and dividends are taxable

Step 3: Fund Your Account

Method	Speed	Fund
Instant deposit (Wealthsimple)	Instant (up to $1,500)	Fastest
e-Transfer	Same day	Free
Electronic funds transfer (EFT)	1–3 business days	Free
Wire transfer	Same day	$15–$30 fee
Bill payment	1–2 business days	Free

Step 4: Buy Your Index Fund

Action	How
Search for the ETF	Enter the ticker (e.g., XEQT, VEQT, VFV)
Choose order type	Market order (fastest) or limit order (set your price)
Enter quantity	Number of shares, or dollar amount (fractional shares on Wealthsimple)
Confirm and buy	Review and submit

Step 5: Set Up Automatic Investing

Feature	Wealthsimple	Questrade	Banks
Automatic deposits	✅ (weekly, biweekly, monthly)	✅	✅
Automatic ETF purchases	✅ (auto-invest feature)	❌ (manual)	❌ (manual)
Fractional shares	✅	❌	❌

Sample Index Fund Portfolios

One-Fund Portfolio (Simplest)

Risk Level	ETF	Allocation
Aggressive	XEQT or VEQT	100%
Growth	XGRO or VGRO	100%
Balanced	XBAL or VBAL	100%
Conservative	VCNS or VCIP	100%

Three-Fund Portfolio (More Control)

ETF	Allocation	Purpose
XIC or VCN	25%	Canadian stocks
XUS or VFV	50%	US stocks (S&P 500)
XEF or VIU	25%	International stocks

Four-Fund Portfolio (With Bonds)

ETF	Allocation	Purpose
VCN	20%	Canadian stocks
VFV	35%	US stocks
VIU	20%	International stocks
ZAG	25%	Canadian bonds

How Much Can Index Funds Grow?

Historical average returns of key indices (annualized, last 30 years):

Index	Average Annual Return	$500/Month Over 25 Years
S&P 500	~10.5%	~$696,000
S&P/TSX Composite	~8.5%	~$522,000
Global stocks (MSCI World)	~9.5%	~$600,000
Canadian bonds	~4.5%	~$277,000

Monthly Investment	10 Years (7% Return)	20 Years	30 Years
$100	$17,300	$52,000	$122,000
$250	$43,300	$130,000	$305,000
$500	$86,600	$260,000	$610,000
$1,000	$173,200	$520,000	$1,220,000

Common Mistakes to Avoid

Mistake	Why It’s Wrong	What to Do Instead
Buying mutual fund versions instead of ETFs	MER is 5-10x higher	Buy the ETF version (e.g., VFV, not a mutual fund tracking S&P 500)
Trying to time the market	Even professionals can’t do this consistently	Invest regularly (dollar-cost averaging)
Checking portfolio daily	Causes emotional decisions	Check monthly or quarterly
Holding too many overlapping ETFs	Adds complexity without benefit	One or two all-in-one ETFs is sufficient
Ignoring foreign withholding tax	US dividends taxed 15% in TFSA	Hold US-heavy ETFs in RRSP when possible