3 Canadian ETFs to Buy and Hold Now in Your TFSA

The Tax-Free Savings Account (TFSA) is one of the most flexible investing tools Canadians have. Growth, income, and withdrawals are all sheltered from tax, which makes long-term compounding far more powerful than in a non-registered account.

For most investors, I think the best TFSA strategy is boring by design. Broad diversification, low costs, and exposure to high-quality markets matter far more than clever stock picking.

With that in mind, here are three Canadian-listed exchange-traded funds (ETFs) that can work together as long-term TFSA holdings, covering U.S. equities, Canadian equities, and developed markets outside North America.

Vanguard S&P 500 Index ETF

Vanguard S&P 500 Index ETF (TSX:VFV) provides exposure to the S&P 500, which tracks 500 of the largest and most profitable U.S. companies. These firms must meet size, liquidity, and profitability requirements, making the index a reasonable proxy for the core of the U.S. economy.

VFV gives you exposure to technology, healthcare, financials, consumer companies, and industrial leaders that generate a large share of global profits. The ETF trades in Canadian dollars, so there is no need to convert currency, and it carries a low 0.09% expense ratio. For TFSA investors focused on long-term growth, U.S. equities remain difficult to ignore.

iShares Core S&P/TSX Capped Composite Index ETF

iShares Core S&P/TSX Capped Composite Index ETF (TSX:XIC) offers broad exposure to the Canadian equity market. It holds large and mid-cap Canadian stocks across sectors such as financials, energy, materials, industrials, and telecommunications.

Canada’s market is more concentrated than the U.S., but it also offers strong dividend income and exposure to real assets like banks, pipelines, and railways. XIC is inexpensive, with a 0.06% expense ratio, and its distributions are largely eligible Canadian dividends. Inside a TFSA, those dividends compound without tax drag, making it a solid domestic core holding.

BMO MSCI EAFE Index ETF

To round out geographic diversification, BMO MSCI EAFE Index ETF (TSX:ZEA) provides exposure to developed markets outside North America. EAFE stands for Europe, Australasia, and the Far East, and the index excludes emerging markets.

ZEA holds nearly 700 stocks across countries such as Japan, the United Kingdom, Switzerland, France, Germany, and Australia. Sector exposure differs meaningfully from North America, with higher weights in financials, industrials, and healthcare. The ETF charges a 0.22% expense ratio and offers a modest yield, adding diversification benefits rather than an income focus.

The post 3 Canadian ETFs to Buy and Hold Now in Your TFSA appeared first on The Motley Fool Canada.

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More reading

• The Only Index Fund I’d Buy and Never Sell
• Here Are My 2 Favourite ETFs for 2026
• The TFSA’s Hidden Fine Print When It Comes to U.S. Investments
• The Best $21,000 TFSA Approach for Canadian Investors

Fool contributor Tony Dong 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.