3 Best Financial Sector ETFs in Canada (June 2026)
The best financial ETFs in Canada include XFN.TO (~0.61% MER), ZEB.TO (~0.28%), and HMAX.TO (~0.65%). These ETFs provide concentrated exposure to Canadian banks and financial institutions, offering strong dividend income but with higher sector risk and sensitivity to economic and interest rate changes.
Financial sector ETFs are designed for Canadian investors seeking exposure to banks, insurance companies, and financial services firms. ETFs like XFN.TO, HMAX.TO, and ZEB.TO provide concentrated access to one of the most important sectors in the Canadian economy, which is known for strong dividends and stable earnings.
The key appeal of financial ETFs is income and reliability, as Canadian banks have a long history of consistent dividends. However, these ETFs are highly concentrated and sensitive to economic cycles, interest rates, and credit conditions.
In this guide, we break down the best financial sector ETFs in Canada, comparing yield, diversification, fees, and risk so you can decide if these sector-focused ETFs fit your TFSA, RRSP, or income 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 XFN.TO iShares S&P/TSX Capped Financials Index ETF | — | $2.2B | 2.16% | +19.26% | +48.08% |
HMAX.TO Hamilton Canadian Financials YIELD MAXIMIZER ETF | — | $2.4B | 11.54% | +11.12% | +39.17% |
ZEB.TO BMO S&P/TSX Equal Weight Banks | — | $5.6B | 2.53% | +27.55% | +67.94% |
What Is an ETF?
A financial sector ETF in Canada is an exchange-traded fund that invests in companies within the financial industry, including banks, insurance companies, asset managers, and other financial institutions. These ETFs provide targeted exposure to a single sector rather than the broader market.
For example, XFN.TO (~0.61% MER) tracks the S&P/TSX Capped Financials Index, offering exposure to major Canadian banks and insurers. ZEB.TO (~0.28% MER) uses an equal-weight approach across Canadian banks, reducing concentration risk. HMAX.TO (~0.65% MER) enhances income through a covered call strategy on Canadian financial stocks.
Financial ETFs are commonly used in TFSAs and income portfolios due to their strong dividend yields. However, investors should be aware of sector concentration and sensitivity to economic and interest rate changes.
The 3 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
iShares S&P/TSX Capped Financials Index ETF
$93.82
+19.26% YTD
Returns
YTD
+19.26%
1Y
+48.08%
3Y
+31.86%
5Y
+18.22%
Hamilton Canadian Financials YIELD MAXIMIZER ETF
$18.09
+11.12% YTD
HMAX is designed for attractive monthly income, while providing exposure to a market cap-weighted portfolio of Canadian financial services stocks. To reduce volatility and augment dividend income, HMAX will employ an active covered call strategy.
Returns
YTD
+11.12%
1Y
+39.17%
3Y
+22.96%
5Y
—
BMO S&P/TSX Equal Weight Banks
$75.01
+27.55% YTD
Returns
YTD
+27.55%
1Y
+67.94%
3Y
+35.32%
5Y
+19.53%
Pros & Cons
Pros
- Strong dividend income from Canadian banks and financial institutions
- Exposure to a stable and well-regulated sector in Canada
- Easy access to major financial companies through a single ETF
- Options available for income enhancement (covered call strategies)
Cons
- High concentration in a single sector increases risk
- Performance tied closely to economic conditions and interest rates
- Limited diversification compared to broad-market ETFs
- Covered call ETFs may limit upside during strong market rallies
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 financial ETF in Canada?
XFN.TO is one of the most widely used financial ETFs in Canada due to its broad exposure to banks and insurers. ZEB.TO offers an equal-weight alternative across major banks, while HMAX.TO focuses on higher income using a covered call strategy.
Are financial sector ETFs risky?
Financial sector ETFs carry moderate risk because they are concentrated in a single sector. Their performance depends heavily on economic conditions, interest rates, and credit markets, making them more volatile than diversified ETFs.
Are financial ETFs good for a TFSA or RRSP?
Financial ETFs can be held in both TFSAs and RRSPs. In a TFSA, dividend income and capital gains are tax-free, while in an RRSP, taxes are deferred. They are commonly used for income within a diversified portfolio.