The Amateur Investor: Just ETF and chill

Not sure where to put your money? Exchange-traded funds may be the answer.

Published Jul 26, 2026  •  4 minute read

The stock ticker at the BMO building on the corner of Bay and King Streets with pedestrians walking by in Toronto, Ontario on Thursday, July 16. Photo by Peter Power /Postmedia Network

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OK, you may have some disposable income that you want to put into the market, after all your taxes and day-to-day expenses. But you don’t know which stock to buy.

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So why not buy them all? You can do that with an ETF.

An ETF, or exchange-traded fund, is a type of security that pools investment money to buy a diversified portfolio of assets that are then grouped into one fund. They’re bought and sold on the market like individual stocks, but unlike stocks, you pay a management expense ratio (or MER) to own them.

ETF vs. mutual fund

Sounds like a mutual fund, right? But ETFs trade continuously through a market day, as opposed to mutual funds which are traded once a day, which means you can enter and exit an ETF during the trading day instead of having to wait. ETFs usually have lower management fees than mutual funds as well, but you may pay a trading commission fee to buy them. Bankers usually push mutual funds first because of their higher expense ratios, so keep that in mind the next time you meet with a financial adviser.

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Why ETFs, and what they do

Investors usually buy into ETFs for peace of mind: Funds expose you to a wide array of companies, and the diversity of the fund minimizes the impact of a loss if any one stock it owns goes down, part of the reason why the pros often tell retail investors, “ETF and chill.”

You can buy all kinds of differently themed ETFs based on what you want your portfolio to do: They range from index ETFs that track the S&P 500 or Nasdaq, income-yielding ETFs that pay big dividends, ETFs based on sectors such as technology, critical minerals, or healthcare, ETFs that track the biggest companies by country (Japan and Germany are among the most popular with these ones) or commodity-based ETFs that follow oil, gold or silver.

So knowing that, here’s a look at some of the most popular ETFs on the Canadian and U.S. markets, how much they are, what companies they hold and what you can expect from them. All prices are from end-of-trading day July 17.

BMO S&P 500 ETF ($ZSP)
Price: $114.38
Top 5 holdings: Nvidia, Apple, Microsoft, Amazon, Google
Quarterly dividend/Yield: $0.24/0.77%
MER: 0.09%
Morningstar Rating: 4 out of 5

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One of Canada’s most popular ETFs, Bank of Montreal’s $ZSP fund tracks the performance of the S&P 500 Index, at a considerably more affordable buy-in than American counterparts such as $VOO or $SPY that trade somewhere north of $650-$700 U.S. per share. It’s weighted in the world’s largest companies, such as U.S. tech giants Nvidia, Microsoft and emerging chip maker Micron, and with a 0.09% MER, the asking price to manage your money is more than reasonable. The caveat (or benefit, depending on how you look at it) is that $ZSP also trades in Canadian dollars, and is unhedged, which means it’s directly exposed to U.S. dollar fluctuations. So if the U.S. dollar goes up, the value of your investment in this fund rises too. If it goes down, the opposite happens.

$ZSP vs. $VFV

The Vanguard S&P 500 ETF is similar to $ZSP. Both have identical MERs and performance, but $ZSP directly buys the stocks it holds, while the Canadian $VFV fund holds the U.S. $VOO fund, essentially a Canadian wrapper. $VFV also has a higher buy-in at $185.25, but both are top picks among Canadian investors.

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Vanguard FTSE Canadian High Dividend Yield ETF ($VDY)
Price: $78.79
Top 5 holdings: Royal Bank, TD, BMO, Enbridge, Scotiabank
Monthly dividend/Yield: $0.18/2.76%
MER: 0.22%
Morningstar Rating: 5 out of 5

$VDY is the ETF of choice for the Canadian income investor, and after going from $52 to the high $70 range, it does a pretty good job of appreciating in value as well. $VDY’s top holdings include Canada’s biggest banks and energy giants such as Canadian Natural Resources, TC Energy and Suncor — among the most dependable dividend payers on the TSX. So you get a reliable source of tax-efficient investment income per month while the value of your stake in the fund grows.

There is a downside, albeit a small one: As $VDY is highly concentrated in Canadian finance and energy, it’s more exposed to the risks of these sectors than an index-tracking or total-market ETF, for example. That could affect your monthly payout. Aside from that, if you’re thinking of starting an investment account in your TFSA or RRSP, $VDY might be a good place for you to start.

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Schwab U.S. Dividend Equity ETF ($SCHD)
Price: $32.90 (U.S.)
Top 5 holdings: Merck & Co., Home Depot, United Health, Amgen, Abbott Laboratories
Quarterly Dividend/Yield: $0.25/3.19%
MER: 0.06%
Morningstar rating: 3 out of 5

Often hailed by American retail investors as the king of income ETFs, $SCHD tracks the total return of the Dow Jones U.S. Dividend 100 Index. It aims to pay out a reliable 3%-4% quarterly dividend while ambitiously appreciating the long-term value of the fund. Rather than just targeting America’s highest dividend payers, $SCHD looks for companies in stable sectors (e.g. healthcare, consumer brand names and industrials) that focus on overall profitability and increasing their dividend payments over time. For the dirt-cheap MER of 0.06%, you get highly active fund management: every quarter, the fund rebalances its portfolio and every March, it reconstitutes with different companies based on which ones do and do not meet its strict criteria.  For the Canadian investor looking to make American cash without having to pay the U.S. withhold tax, $SCHD is an ideal candidate for an RRSP account.

Disclaimer: The information contained in this column is for informational purposes and is not intended to be investment advice or an offer or recommendation to buy or sell any security. Brian Towie is not a certified financial adviser and encourages readers to do their own diligence before investing their money.

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