If you’re new to investing, the hardest part is often just getting started. There are thousands of stocks on the market to consider, and a constant flow of news and economic data to keep up with, which can make even taking that first step feel daunting. The good news is that investing doesn’t have to be complicated. In fact, one of the easiest ways to begin is by starting with high-quality Canadian ETFs.
Instead of trying to analyze individual companies right away, ETFs allow you to gain exposure to dozens of businesses at once with a single purchase.
That instantly reduces single-stock risk and helps to smooth out any volatility, which makes it much easier to stay disciplined for the long haul.
It also allows you to dip your toes in the market and start to learn about investing, while owning a reliable fund that offers broad exposure to specific sectors or even the entire economy.
So, if you’re new to investing and just getting started or just want something straightforward, here are two simple Canadian ETFs that any Canadian can buy today.
Source: Getty Images
One of the best Canadian ETFs to buy for instant diversification
If you’re new to investing and want a simple way to put your hard-earned money to work in the stock market stock, the BMO S&P/TSX Capped Composite Index ETF (TSX:ZCN) is an investment that’s about as straightforward as it gets.
The ZCN ETF tracks the S&P/TSX Capped Composite Index, which includes many of the largest and most established publicly traded companies in Canada.
That means when you buy the ZCN, you’re getting exposure to major companies across Canada like energy producers, railways, utilities, telecoms, and more, all in one fund.
This is much simpler for new investors because instead of having to assess individual companies, and how the economic environment is impacting them, you’re essentially buying into the entire market.
This is ideal for new investors for several reasons. First of all, you get instant diversification. If one company or even an entire sector struggles, it doesn’t derail your entire portfolio.
Second of all, it’s low cost. Index ETFs like the ZCN typically have very low management expense ratios (MERs), which means more of your returns stay in your pocket.
So why does gaining exposure to the entire market make sense? Because over time, the Canadian market has rewarded patient investors who simply stayed invested. The economy is always growing, and when you own a fund of the largest and most well-established stocks across the economy, you participate in that long-term growth.
So, if you’re looking for Canadian ETFs to help make investing simple, the ZCN is a top choice.
One of the best funds to buy for exposure to Canadian banks
In addition to the ZCN ETF another top-notch Canadian ETF for new investors to consider now is the BMO Equal Weight Banks Index ETF (TSX:ZEB).
While the ZCN gives you exposure to the entire Canadian market, the ZEB ETF focuses only on bank stocks, one of the strongest and most dominant sectors in the country.
Canadian banks are widely considered some of the most stable financial institutions in the world. They operate in a highly regulated environment, generate significant recurring revenue through lending and wealth management, and have long track records of paying dividends.
However, while Canadian bank stocks are excellent long-term investments, new investors may struggle to assess which are positioned the best over the coming years. Banks can have complicated financials and are impacted differently by changing economic environments.
That’s why the ZEB ETF makes sense for new Canadian investors. It invests in Canada’s major banks, but instead of weighting them by size, it gives each bank an equal allocation. That means no single bank dominates the portfolio.
So, you get exposure to a sector that has historically generated strong long-term returns and reliable dividend income. Furthermore, banks tend to perform well over long periods because they’re deeply tied to the Canadian economy. As businesses grow, mortgages are issued, and consumers borrow and invest, banks benefit.
So, if you’re new to investing and looking for a simple and reliable Canadian ETF to buy now, the ZEB is one you’ll want to consider.