What are we looking for?
Cheapest well-rated ETFs in the most popular categories.
The screen
Canadians have become far more fee-conscious investors. This is clearer than ever in Morningstar’s recent asset flows data. Over the decade ending June, 2026, investors poured more than $280-billion into funds that Morningstar classifies as having low fees, while withdrawing roughly $13-billion from funds with high fees. There were a few exceptions during periods of market stress and speculative enthusiasm, but the broader trend has been clear: Investors increasingly prefer products that leave more of the return in their own pockets.
The industry has responded. Asset managers continue to compete aggressively on cost (especially in areas like plain vanilla stock index exposure), while regulators have pushed for greater transparency. Investors already receive more detailed reporting on investment costs than they did a decade ago. And beginning in 2027, Total Cost Reporting requirements introduced by Canadian securities regulators will provide an even clearer picture of what consumers are paying for investment products and advice.
Of course, low fees alone don’t make a good investment. An ETF can be inexpensive and still be poorly constructed, tax inefficient or difficult to own through different market environments. Hence, today’s screen doesn’t simply look for the cheapest ETFs available.
Using the Morningstar Direct platform, I screened four of the largest ETF categories by assets under management. I then looked for funds that met three criteria: exceptionally low fees relative to peers; a five-star Morningstar rating based on historical risk-adjusted performance; and a Morningstar medal rating of bronze, silver or gold, indicating our analysts believe the fund has attributes that could help it outperform over the long term.
The result is a shortlist of ETFs that combine low cost, strong historical results and positive forward-looking analyst conviction. For investors looking to keep more of their returns, while maintaining quality exposure to major asset classes, these funds may be worth a closer look.
What we found
The ETFs that met the above requirements are listed in the table accompanying this article inclusive of ticker, fees, trailing returns, Morningstar ratings, asset allocations and whether they are actively or passively managed. Investors are urged to first look at the category to which each ETF belongs, as these industry-standard categories are the basis of Morningstar’s rating system.
This article does not constitute financial advice. Readers are encouraged to conduct their own research before buying or selling any of the funds or ETFs listed here.
Ian Tam, CFA, is director of investment research for Morningstar Canada.