2 Best ETFs for Non-Registered Accounts in Canada (June 2026)
The best ETFs for non-registered accounts in Canada include VUN.TO (~0.06% MER), XAW.TO (~0.22%), and tax-efficient options like HXT.TO and HXQ.TO. These ETFs focus on capital gains and low distributions, helping investors minimize taxes and improve after-tax returns in taxable investment accounts.
Choosing the best ETFs for a non-registered account in Canada is all about tax efficiency. Unlike TFSAs and RRSPs, investment income here is taxable, so minimizing distributions and maximizing capital gains becomes critical.
ETFs like VUN.TO and XAW.TO are popular because they provide broad diversification while keeping costs low. Some investors also use swap-based ETFs like HXT.TO or HXQ.TO to reduce taxable distributions.
In this guide, we break down the best ETFs for non-registered accounts in Canada, focusing on tax efficiency, diversification, and long-term after-tax returns.
At a Glance: Quick Comparison
Side-by-side snapshot of fees, yield, and returns. Data updates daily.
| ETF | MER | AUM | Yield | YTD | 1Y |
|---|---|---|---|---|---|
Top VUN.TO Vanguard US Total Market | — | $18.2B | 0.80% | +12.31% | +30.12% |
XAW.TO iShares Core MSCI All Country World ex Canada Index ETF | — | $4.2B | 1.25% | +13.27% | +30.81% |
What Is an ETF?
The best ETF strategy for a non-registered account in Canada is to prioritize tax efficiency by minimizing interest income and foreign withholding tax while favoring capital gains.
For example, VUN.TO (~0.06% MER) provides broad U.S. market exposure, while XAW.TO (~0.22%) offers global diversification excluding Canada. HXT.TO (~0.03%) and HXQ.TO (~0.20%) use total return swap structures to reduce taxable distributions.
In non-registered accounts, capital gains are taxed more favourably than interest income. Investors should focus on low-turnover ETFs, tax-efficient structures, and proper asset location to improve after-tax returns.
The 2 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
Vanguard US Total Market
$140.84
+12.31% YTD
Vanguard U.S. Total Market Index ETF seeks to track, to the extent reasonably possible and before fees and expenses, the performance of a broad U.S. equity index that measures the investment returns of primarily large-capitalization U.S. stocks. Currently, this Vanguard ETF seeks to track the CRSP US Total Market Index (or any successor thereto). It invests directly or indirectly primarily in stocks of U.S. companies.
Returns
YTD
+12.31%
1Y
+30.12%
3Y
+23.45%
5Y
+15.53%
iShares Core MSCI All Country World ex Canada Index ETF
$58.37
+13.27% YTD
NA
Returns
YTD
+13.27%
1Y
+30.81%
3Y
+22.14%
5Y
+14.06%
Pros & Cons
Pros
- Flexibility with no contribution limits or withdrawal restrictions
- Capital gains taxed more favourably than interest income
- Access to tax-efficient ETF structures like swap-based funds
- Full control over asset location and tax planning
Cons
- Dividends and interest income are taxable annually
- Foreign withholding taxes may apply
- More complex tax reporting compared to registered accounts
- Requires careful ETF selection to optimize after-tax returns
Compare These ETFs Head-to-Head
Drill into a side-by-side breakdown of performance, AUM, and yield.
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Frequently Asked Questions
What is the best ETF for a non-registered account in Canada?
VUN.TO and XAW.TO are strong choices for non-registered accounts due to their diversification and low fees. Some investors also use HXT.TO or HXQ.TO for improved tax efficiency through reduced distributions.
What makes an ETF tax-efficient in a non-registered account?
Tax-efficient ETFs minimize taxable distributions and focus on capital gains. Swap-based ETFs and low-turnover index funds are often preferred because they reduce annual tax drag.
Should I avoid dividend ETFs in a non-registered account?
Not necessarily, but dividends are taxable annually. Many investors prioritize growth-oriented ETFs instead, as capital gains are taxed more favourably and only when realized.