2 Best Utilities ETFs in Canada (June 2026)
The best utilities ETFs in Canada include ZUT.TO (~0.61% MER) and XUT.TO (~0.61%). These ETFs provide exposure to stable, income-generating utility companies, offering defensive characteristics and consistent dividends, but with sensitivity to interest rates and lower growth potential compared to broader equity ETFs.
Utilities ETFs are designed for Canadian investors seeking stable income and lower volatility exposure within their portfolios. ETFs like ZUT.TO and XUT.TO provide access to companies in regulated industries such as electricity, gas, and infrastructure.
The key advantage of utilities ETFs is their defensive nature, as demand for utilities remains relatively consistent regardless of economic conditions. However, these ETFs can be sensitive to interest rates and may underperform during strong bull markets.
In this guide, we break down the best utilities ETFs in Canada, comparing yield, diversification, and risk so you can decide how they fit into your TFSA, RRSP, or income-focused 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 ZUT.TO BMO Equal Weight Utilities Index ETF | — | $902M | 2.78% | +18.36% | +27.59% |
XUT.TO iShares S&P/TSX Capped Utilities Index ETF | — | $506M | 3.23% | +14.23% | +25.97% |
What Is an ETF?
A utilities ETF in Canada is an exchange-traded fund that invests in companies providing essential services such as electricity, natural gas, and water. These ETFs offer exposure to a defensive sector known for stable cash flows and consistent dividend payments.
For example, ZUT.TO (~0.61% MER) provides exposure to North American utilities companies with a strong income focus. XUT.TO (~0.61% MER) tracks Canadian utilities, offering domestic exposure to regulated providers. VUT.TO (~0.06% MER) offers a lower-cost option focused on Canadian utilities stocks.
Utilities ETFs are commonly used in TFSAs and RRSPs for income and stability. Investors should consider interest rate sensitivity, as rising rates can pressure utility stocks due to their bond-like characteristics.
The 2 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
BMO Equal Weight Utilities Index ETF
$30.10
+18.36% YTD
Returns
YTD
+18.36%
1Y
+27.59%
3Y
+13.79%
5Y
+7.39%
iShares S&P/TSX Capped Utilities Index ETF
$36.60
+14.23% YTD
Returns
YTD
+14.23%
1Y
+25.97%
3Y
+13.12%
5Y
+7.91%
Pros & Cons
Pros
- Stable income through consistent dividends from regulated utilities
- Defensive sector that performs relatively well during market downturns
- Lower volatility compared to growth sectors like technology
- Useful for income-focused or conservative investors
Cons
- Sensitive to rising interest rates, which can reduce valuations
- Limited growth potential compared to higher-growth sectors
- Sector concentration increases risk compared to broad ETFs
- Can underperform during strong bull markets
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 utilities ETF in Canada?
ZUT.TO is one of the most popular utilities ETFs in Canada due to its diversified exposure to North American utility companies and strong income focus. XUT.TO is another option for investors seeking Canadian-only utilities exposure.
Are utilities ETFs a good investment?
Utilities ETFs can be a good investment for income-focused or conservative investors because they provide stable dividends and lower volatility. However, they typically offer slower growth compared to broader market ETFs.
Are utilities ETFs good for a TFSA or RRSP?
Utilities ETFs can be held in both TFSAs and RRSPs. In a TFSA, dividend income is tax-free, while in an RRSP, taxes are deferred. They are often used to generate stable income within a diversified portfolio.