2 Best Low-Volatility ETFs in Canada (June 2026)
The best low-volatility ETFs in Canada include ZLB.TO (~0.35% MER), XMV.TO (~0.30%), and ZLU.TO (~0.40%). These ETFs select stocks based on price stability, aiming to reduce portfolio volatility while maintaining equity exposure, making them suitable for investors seeking smoother returns and lower downside risk.
Low-volatility ETFs in Canada are designed to reduce portfolio swings by investing in stocks that historically exhibit more stable price movements. These ETFs focus on defensive sectors and lower-risk companies, helping investors stay invested during market downturns.
ETFs like ZLB.TO and XMV.TO select stocks based on volatility metrics rather than market capitalization, aiming to deliver smoother returns over time. While they may lag in strong bull markets, they can outperform during periods of uncertainty.
In this guide, we break down the best low-volatility ETFs in Canada, comparing strategy, risk reduction, and fees to help you choose the right option.
At a Glance: Quick Comparison
Side-by-side snapshot of fees, yield, and returns. Data updates daily.
| ETF | MER | AUM | Yield | YTD | 1Y |
|---|---|---|---|---|---|
Top ZLB.TO BMO Low Volatility Canadian Equity | 0.35% | $6.1B | 1.89% | +2.57% | +15.64% |
XMV.TO iShares MSCI Canada Minimum Volatility | — | $414M | 2.14% | +7.43% | +19.97% |
What Is an ETF?
A low-volatility ETF in Canada is an exchange-traded fund that selects stocks based on their historical price stability rather than size or market weight. These ETFs aim to reduce portfolio volatility while still providing equity exposure.
For example, ZLB.TO (~0.35% MER) focuses on low-volatility Canadian equities, while XMV.TO (~0.30%) tracks a similar strategy using minimum volatility screening. ZLU.TO (~0.40%) provides low-volatility exposure to U.S. equities, and ULV offers a comparable U.S.-listed option.
Low-volatility ETFs are commonly used in TFSAs, RRSPs, and balanced portfolios. They are ideal for investors seeking equity exposure with reduced downside risk.
The 2 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
BMO Low Volatility Canadian Equity
$59.45
+2.57% YTD
Returns
YTD
+2.57%
1Y
+15.64%
3Y
+15.89%
5Y
+11.98%
iShares MSCI Canada Minimum Volatility
$58.99
+7.43% YTD
Returns
YTD
+7.43%
1Y
+19.97%
3Y
+18.88%
5Y
+13.93%
Pros & Cons
Pros
- Reduced portfolio volatility compared to broad-market ETFs
- Can outperform during market downturns
- Provides equity exposure with lower risk profile
- Helps investors stay invested during market swings
Cons
- May underperform in strong bull markets
- Sector concentration (often heavy in defensive sectors like utilities)
- Higher MERs than basic index ETFs
- Not immune to market declines
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 low-volatility ETF in Canada?
ZLB.TO is one of the most popular low-volatility ETFs in Canada due to its focus on stable Canadian equities, while XMV.TO offers a similar strategy with slightly different holdings and methodology.
Do low-volatility ETFs outperform the market?
Low-volatility ETFs can outperform during market downturns but may lag during strong bull markets. Their goal is to reduce risk and smooth returns rather than maximize growth.
Are low-volatility ETFs good for beginners?
Yes, low-volatility ETFs can be suitable for beginners who want equity exposure with reduced risk. However, they should still be part of a diversified portfolio rather than a complete solution.