5 Best Buy and Hold ETFs for Long-Term Investors

Nearly 70% of ETF assets today sit in funds that charge less than 0.20% in fees. This shift has lowered long-term costs for everyday investors.

We look at low-cost, broadly diversified, and tax-efficient ETFs. These come from well-known issuers like Vanguard, iShares (BlackRock), BMO, Global X, and Horizons.

We exclude leveraged, inverse, and exchange-traded notes. The selection is based on Morningstar Direct performance data (through January 2026). We also look at brokerage flow evidence, including CIBC Investor’s Edge client activity.

Our criteria include funds with scale, tight tracking, and consistent market liquidity.

Key ETF fundamentals are outlined where relevant. This includes intraday trading versus mutual fund pricing. We also discuss expense ratio trends after recent fee cuts.

Why ETFs Are Ideal for a Buy and Hold Strategy

Exchange-traded funds (ETFs) offer a mix of stock-like performance and diversified investment. They also have the advantage of being easy to manage, thanks to their structure.

How ETFs trade like stocks and provide intraday liquidity

ETFs trade on exchanges all day long. Investors can use various orders to buy and sell. As trading volume increases, the cost of transactions goes down.

Passive vs active ETFs: cost, tracking, and long-term performance

Passive ETFs are cheaper to maintain. This means more money stays in your pocket over time. Active ETFs might do better in specific areas, but they cost more and come with more risk.

Key metrics for buy-and-hold investors: expense ratio, AUM, tracking error, and diversification

The expense ratio is key for long-term gains. Larger funds mean better liquidity and lower costs. Tracking error shows how well an ETF tracks its benchmark. Diversification is also important, as it reduces risk.

Historical evidence for buy-and-hold using broad-based ETFs

Broad-market ETFs have seen steady growth with less risk. Short-term winners can be tempting but often come with big losses.

How we screened and selected the 5 best buy and hold etfs

We started by using clear, measurable filters for long-term investors. We looked for funds with low expense ratios and stable passive indexing. Funds from well-known issuers like Vanguard and BlackRock were given priority.

Screening criteria: low fees, passive indexing, long-term returns, and issuer track record

Low expense ratios were a key factor. They help with compounding over time. We also checked if the indexing was transparent and consistent.

Funds that track broad, well-known benchmarks were preferred. This made them more reliable for long-term investing.

Long-term returns were compared over at least two market cycles. We looked for consistent performance, not just short-term gains. The issuer’s track record helped decide when metrics were close.

Minimum asset thresholds and liquidity considerations

Asset size and trading volume were essential. Small funds can have higher costs. In Canada, we used a C$10 million floor.

In the U.S., we looked for larger AUM and steady volume. This kept costs low for retail investors.

Bid-ask spread and average daily volume were also reviewed. Funds with thin trading or poor liquidity were excluded, even with low fees.

Use of third-party data sources and Morningstar ratings in vetting holdings

We used third-party data to reduce bias. Morningstar Direct metrics and Medalist ratings were used for Canadian funds. For U.S. funds, we looked at Morningstar data and return histories.

Brokerage flow data showed demand and liquidity.

Why certain niche or leveraged ETFs were excluded from buy-and-hold recommendations

Niche, leveraged, and inverse ETFs were excluded. They have high risk and can deviate from their index. Recent winners in natural resources showed high returns but with high risks.

These funds are not suitable for long-term investing. We focused on stable, low-maintenance options for long-term investors.

The final list is for practical, low-cost, and durable core allocations. It’s for long-term investors looking for stability.

Core ETF pick: broad U.S. market ETF for long-term growth

A total U.S. market ETF is key for a buy-and-hold portfolio. U.S. stocks make up a big part of the global market. They include many companies that grow over the long term.

Why a total U.S. market fund deserves core status

Choosing a broad U.S. ETF reduces risk. It helps avoid focusing too much on one stock or sector. This way, you’re more likely to own winners across different industries.

What to check when selecting a fund

Start with the expense ratio. Lower fees mean more money in your pocket over time. Look at the tracking error to see how well the ETF mirrors its benchmark.

Tight tracking is good for steady performance. For taxable accounts, tax efficiency is key. Look for ETFs that distribute qualified dividends and use in-kind creation/redemption to keep capital gains low.

Practical selection criteria and metrics

• Expense ratio under industry leaders like Vanguard or iShares.
• Tracking error measured against CRSP or S&P Total Market benchmarks.
• High assets under management for liquidity and narrow bid-ask spreads.
• Dividend tax treatment and historical capital-gains distributions.

Representative U.S. core funds and Canadian alternatives

In the U.S., Vanguard Total Stock Market ETF (VTI) and iShares Core S&P Total U.S. Market ETFs are popular. They offer low fees and track their benchmarks well, making them favorites among long-term investors.

Canadian investors can use CAD-listed ETFs like Vanguard S&P 500 ETF (VFV) and Horizon S&P 500 (HXS). These track U.S. indices. The provider structure affects tax efficiency, so some CAD products might change after-tax returns and tracking behavior.

Using a single broad U.S. market ETF makes rebalancing easier and lowers risk. It’s a key part of a strategy that focuses on durable, low-cost investments.

Core ETF pick: global ex-U.S. ETF to diversify international exposure

International equities offer returns different from the U.S. market. Non-U.S. economies have unique sector weights, currency cycles, and growth stages. A global ex-US ETF can reduce risk by diversifying with U.S. core holdings.

Role of international equities in long-term growth and risk reduction

Exposure to developed and emerging markets spreads risk. Markets like Japan, Europe, and China lead in different sectors than the U.S. Long-term investments in these regions capture varied growth drivers and diversify cyclical exposure.

Comparing all‑cap global ex‑home ETFs and expense tradeoffs

All-cap funds cover large-, mid-, and small-cap stocks to avoid size bias. Vanguard and iShares offer funds with different breadth and fees. Slightly higher fees can be worth it for broader coverage or access to less liquid markets.

Practical portfolio allocations and rebalancing guidance

Target international equity allocations range from 20% to 40% of total equity, based on risk tolerance. Rebalance annually or when allocations drift by about five percentage points.

Decision Factor	Trade-off	Practical Rule
Coverage (large/mid/small-cap)	Broader coverage raises diversification but may increase fees slightly	Prefer all-cap global ex-US ETF when long-term diversification matters
Expense ratio	Lower MERs reduce drag over decades; tiny differences compound	Choose funds with competitive fees unless breadth justifies premium
Liquidity and AUM	Low liquidity increases tracking risk; small AUM risks closure	Select ETFs with solid assets and daily trading volume
Currency exposure	Unhedged funds introduce FX volatility; hedged funds add cost	Use unhedged for long horizons unless home-currency risk is a primary concern
Allocation target	Too little international leaves concentration risk in U.S.	Set 20–40% of equity to international, review annually
Rebalancing trigger	Frequent rebalances increase transaction costs	Rebalance yearly or at +/-5% drift; use tax-aware methods in taxable accounts

Specific fund examples help illustrate choices. Vanguard FTSE Global All Cap ex U.S.-domiciled options and iShares MSCI ex-U.S. series differ in fee and breadth. These examples are among the top etfs for passive investing, providing broad international exposure for a buy and hold strategy.

For investors considering long-term options, a global ex-US etf complements U.S. holdings. This combination balances growth with diversification, supporting a disciplined buy-and-hold passive investing approach.

Core ETF pick: developed markets or global all-cap ETF for simplicity

All-in-one ETFs offer global equity in one package. This makes rebalancing less often and simplifies tax paperwork.

Behavioral advantages

Choosing one fund reduces decision fatigue. It keeps things simple and helps investors stay on track, even when markets are volatile.

Fee competition and long-term impact

Fees can eat into your returns over time. A small difference in fees can make a big difference over 30 years. Look for funds with low fees from Vanguard, iShares, and Schwab. Choose funds with clear asset mixes and low MERs.

Structure examples and tax considerations

All-in-one ETFs mix equity and bond ETFs in one package. In Canada, VEQT and XEQT are examples. For U.S. investors, check the fund’s tax status and foreign tax credits before making a choice.

Practical selection rules

• Make sure the fund’s asset mix and rebalancing policy match your goals.
• Compare fees from Vanguard, iShares, and Charles Schwab.
• Check the fund’s size and liquidity to avoid surprises.
• Use tax-advantaged accounts for foreign funds when possible.

They offer broad diversification and are among the top choices for long-term growth.

Core ETF pick: bond or aggregate fixed-income ETF for stability

Fixed-income ETFs bring stability to a long-term portfolio. They help lower overall volatility and provide cash for rebalancing after equity falls. A conservative bond allocation is good for investors with shorter horizons or lower risk tolerance. The right bond etf for buy and hold balances yield and interest-rate risk.

Choose from broad aggregate bond ETFs, short-term funds, and inflation-protected products based on your goals. Aggregate bond ETFs like Vanguard Total Bond Market ETF or iShares Core U.S. Aggregate Bond ETF offer a wide range of government and investment-grade corporate debt. Short-term bond ETFs reduce risk from interest rate changes. TIPS ETFs protect against rising inflation.

When picking, look at expense ratio, duration, and credit quality. Low expense ratios save money over time. Duration shows how sensitive to interest rates the ETF is; shorter duration means less volatility during rate rises. Credit quality affects default risk and long-term returns.

ETF structure is key for buy and hold strategy etfs. Physically backed, diversified funds track benchmarks better. Choose funds with large assets under management and daily liquidity to avoid wide spreads during rebalancing.

Use a simple rule: a core allocation to a low-cost aggregate bond ETF, a sleeve of short-term bonds for interest-rate risk, and a small TIPS position for inflation risk. This mix helps with rebalancing and keeps capital safe when equities fall.

The table below compares common choices for a core fixed-income sleeve. It shows expense, typical duration, and credit focus to help pick top long-term investment etfs for stability.

ETF Type	Representative Funds	Typical Expense Ratio	Average Duration (yrs)	Credit Focus
Aggregate bond ETF	Vanguard Total Bond Market ETF (BND), iShares U.S. Aggregate Bond ETF (AGG)	0.03%–0.05%	6–7	Government and investment-grade corporates
Short-term bond ETF	Vanguard Short-Term Bond ETF (BSV), iShares 1-5 Year Treasury Bond ETF (SHV)	0.03%–0.10%	1–3	High-quality government and short-duration corporates
TIPS ETF	iShares TIPS Bond ETF (TIP), Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)	0.05%–0.20%	3–7 (varies by fund)	Inflation-linked U.S. Treasuries
Canadian broad bond model	BMO Aggregate Bond Index ETF (ZAG)	0.09%	6–7	Canadian government and investment-grade corporates

Choosing a bond etf for buy and hold means matching duration to horizon and checking credit quality. Use low-cost, broad funds as the core. Add short-term or inflation-protected sleeves for specific risks. This approach finds the most durable candidates among top long-term investment etfs for a steady portfolio foundation.

Core ETF pick: sector or thematic ETF considerations for long-term holding

Sector and thematic ETFs can add value to your core investments. They are best when you have a solid plan and can handle focused investments. These ETFs should not replace a broad-market core. Only use them for specific, long-term bets after you’ve done your homework.

When a sector or thematic ETF belongs in a buy-and-hold portfolio

Consider adding a sector or thematic ETF if you have a clear plan. This includes knowing your time frame, why you think it’s a good value, and what signs to look for to change your mind. For example, if you believe in the long-term growth of cloud computing or renewable energy, it might be a good fit.

Risks of concentrated natural resources, energy, or commodity-linked ETFs despite recent strong performance

ETFs like BMO Equal Weight Global Base Metals ETF and iShares S&P/TSX Global Base Metals ETF have seen big gains. But, these gains come with high volatility and are closely tied to commodity prices.

Investing heavily in these areas can lead to big losses. Even if they’ve done well in the past, it’s not a reason to keep investing without a solid reason.

How to size and monitor higher-volatility sector allocations

Keep any single sector or thematic ETF to a small part of your portfolio. A good rule is to not exceed 10% unless you’re very sure it’s right for you. This helps protect your money and keeps your portfolio balanced.

Set rules before you invest. Regularly check your investment and rebalance as needed. You might also want to set limits to protect your investment from big losses.

Look at the details of the ETF you’re considering. Things like what it invests in, how it’s made, and if it uses derivatives or leverage are important. These factors can affect how well it fits into your long-term plan.

When adding a sector or thematic ETF, make sure your core investments are diverse. Keep your overall portfolio aligned with your risk goals. This ensures your investment strategy remains disciplined and focused.

Conclusion

A buy-and-hold ETF portfolio does not need optimization.

It needs durability.

Funds with low fees, deep liquidity, and transparent benchmarks outperform complex structures over long horizons. The rest is noise.

If an ETF requires monitoring beyond annual rebalancing, it does not belong in a long-term core allocation.