2 Best Europe ETFs for Canadian Investors (June 2026)
The best Europe ETFs in Canada include VE.TO (~0.06% MER) and XEU.TO (~0.22%). These ETFs provide exposure to developed European markets, offering diversification beyond North America, but returns are influenced by currency movements, economic growth, and regional risks.
Europe ETFs are designed for Canadian investors seeking exposure to developed markets outside North America. ETFs like VE.TO and XEU.TO provide access to major European economies, including countries like the UK, Germany, France, and Switzerland.
The key advantage of Europe ETFs is diversification into mature global companies across sectors such as financials, industrials, and healthcare. However, investors should consider currency exposure, slower economic growth compared to the U.S., and regional risks.
In this guide, we break down the best Europe ETFs for Canadian investors, comparing diversification, fees, and risk so you can decide how they fit into your TFSA, RRSP, or international portfolio.
At a Glance: Quick Comparison
Side-by-side snapshot of fees, yield, and returns. Data updates daily.
| ETF | MER | AUM | Yield | YTD | 1Y |
|---|---|---|---|---|---|
Top VE.TO Vanguard FTSE Developed Europe All Cap Index ETF | — | $660M | 2.40% | +7.58% | +20.74% |
XEU.TO iShares MSCI Europe IMI Index ETF | — | $681M | 2.30% | +9.62% | +20.28% |
What Is an ETF?
A Europe ETF in Canada is an exchange-traded fund that invests in equities from European countries, providing exposure to developed international markets outside North America. These ETFs allow Canadian investors to diversify geographically and access global industries.
For example, VE.TO (~0.06% MER) provides low-cost exposure to developed markets including Europe, while XEU.TO (~0.22% MER) focuses specifically on European equities. ZEA.TO (~0.22% MER) offers a similar developed markets approach, and VGK (U.S.-listed) tracks a broad European equity index.
Europe ETFs are commonly used in TFSAs and RRSPs for diversification. Investors should consider currency risk (EUR/GBP/CAD), economic growth trends, and regional concentration when investing.
The 2 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
Vanguard FTSE Developed Europe All Cap Index ETF
$48.51
+7.58% YTD
Vanguard FTSE Developed Europe All Cap Index ETF seeks to track, to the extent reasonably possible and before fees and expenses, the performance of a broad European equity index that focuses on developed European markets. Currently, this Vanguard ETF seeks to track the FTSE Developed Europe All Cap Index (or any successor thereto). It invests directly or indirectly primarily in large-, mid-, and small-capitalization stocks of companies located in developed European markets.
Returns
YTD
+7.58%
1Y
+20.74%
3Y
+18.60%
5Y
+11.37%
iShares MSCI Europe IMI Index ETF
$41.48
+9.62% YTD
Returns
YTD
+9.62%
1Y
+20.28%
3Y
+18.41%
5Y
+11.13%
Pros & Cons
Pros
- Exposure to developed European economies and global companies
- Diversification beyond North America and Canada
- Access to sectors like industrials, healthcare, and financials
- Can improve portfolio balance alongside U.S. equities
Cons
- Slower economic growth compared to U.S. markets
- Currency fluctuations (EUR/GBP/CAD) can impact returns
- Regional political and economic risks
- Less exposure to high-growth technology sector
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 Europe ETF in Canada?
VE.TO is a popular low-cost option that includes European exposure within a broader developed markets ETF. XEU.TO provides more targeted exposure to European equities for investors seeking regional diversification.
Are Europe ETFs a good investment?
Europe ETFs can provide diversification and exposure to stable, developed economies. However, they typically offer slower growth compared to U.S. markets and are influenced by currency and regional economic conditions.
Should I include Europe ETFs in my portfolio?
Many investors include Europe ETFs to diversify globally and reduce reliance on North American markets. They are often used alongside U.S. and emerging market ETFs to create a balanced international allocation.