The iShares S&P/TSX 60 Index ETF (TSX:XIU) is an example of a solid exchange-traded fund (ETF) that Canadian investors can reliably hold in their portfolios for the long haul. This fund offers instant diversification across the most established companies in Canada, provides a steady stream of quarterly dividend income, and captures the growth of the nation's economic leaders without the volatility often associated with single-stock ownership.
The ETF delivered a robust return of over 25% in 2025, outperforming many expectations. This surge was driven largely by a recovery in the financial sector and the continued momentum of key technology holdings like Shopify. While financials such as Royal Bank of Canada and Toronto-Dominion Bank constitute nearly 40% of the portfolio, the fund is not merely a play on interest rates. It maintains a healthy balance with significant weightings in the energy sector, including giants like Enbridge and Canadian Natural Resources, which help hedge against inflation and support the fund's reliable yield.
A major advantage for long-term holders is the fund's efficiency. With a management expense ratio of just 0.18%, the cost to own this basket of stocks is minimal compared to actively managed mutual funds. This low fee structure ensures that the majority of the compound growth and dividend income remains with the investor. By focusing strictly on the 60 largest and most liquid stocks on the Toronto Stock Exchange, the fund avoids speculative small-caps, offering a smoother ride during market turbulence.
If you are a passive investor building a retirement portfolio or a newcomer looking for a safe entry point into the Canadian market, this ETF serves as an excellent option to build your portfolio around in 2026.
